The Ministry of Mines and Energy is in the early stages of developing a national oil company, a ministry spokesman said Wednesday.
Meng Saktheara, who is also a secretary of state, said his ministry had been working with the Finance Ministry to assess the risks of setting up an oil company that is owned and operated by the government.
“The government has been studying the possibility of whether the company should be established or not,” Mr. Saktheara said.
“If established, the state-owned petroleum company would play the role of a body that invests money in the oil and gas industry,” he added.
The national oil company would also engage in joint ventures with foreign companies, Mr. Saktheara said.
“We share all the risk…and we share the profit,” he said of such an arrangement.
Mr. Saktheara stressed that if the government did decide to establish its own oil company, then its functions must be laid out in a petroleum law, which his ministry is currently drafting.
“The new draft petroleum law would also stipulate the role and responsibility of the state-owned petroleum company,” he said.
As global oil prices continued to fall last month, Prime Minister Hun Sen in a speech on February 10 asked the Finance Ministry to import more petroleum for the county’s stockpiles.
Mr. Saktheara, however, said the decision to begin assessing whether to establish a national oil company was not in response to the prime minister’s speech.
“We have not consulted with Prime Minister Hun Sen yet,” he said, adding that the ministry had been doing research into starting the company since December.
According to Mr. Saktheara, the ministries are still looking into whether the national oil company would be involved in oil and gas exploration, the import of petroleum for reserves, or both.
“At the moment, we don’t know,” he said. “That is still a question to be discussed and assessed.”
Bin Many Mialia, marketing division manager of PTT (Cambodia) Ltd., a subsidiary of Thailand’s state-owned PTT Public Company Limited, said importing petroleum in order to increase Cambodia’s stores would benefit both the government and those in the industry.
“If the government has their own oil or state enterprise, this is better for Cambodians since the government can control the price on their own,” Mr. Mialia said.
The Commerce Ministry has called regular meetings in recent months to encourage gas companies in the country to adjust their prices to reflect fluctuations in global oil prices, though some firms have been slower than others to comply.
Kim Natacha, executive director of Cambodians for Resource Revenue Transparency, a local NGO, said establishing a national oil company for exploration purposes, however, would only make sense if Cambodia had a large industry.
“But so far, we don’t have enough information to see if we can justify the establishment of a state oil company,” Ms. Natacha said.
“The exploration started pretty recently if we talk in terms of the industry standard, and that information has not been disclosed publicly and widely in a manner that we can use it to analyze,” she added.
Cambodia’s most significant offshore oil reserves are in Block A, a 4,790-sq-km area off the coast of Sihanoukville believed to have the potential to yield as much as 10,000 barrels per day.
After U.S. oil giant Chevron failed for over a decade to extract any oil from Block A, Singaporean oil and gas company KrisEnergy in August bought Chevron’s 30 percent stake in the block. KrisEnergy now holds a controlling interest of 52.25 percent in Block A. The Cambodian government holds a 5 percent stake in the block.
Son Chhay, an opposition CNRP lawmaker who is also deputy chair of the National Assembly’s finance and banking commission, said the government had likely grown impatient waiting for private companies to find oil in Block A and wanted to step in.
“But to create a government company, I think that is not appropriate,” Mr. Chhay said.
“Unless you have so much oil that you can explore, otherwise to just set up an oil company and purchase all the equipment could cost more money than the oil would make.”