A government deal with petroleum giant ChevronTexaco for the exploration and production of oil and gas in the Gulf of Thailand is a positive sign, but may not be lucrative for Cambodia for several years, officials said.
The deal gives ChevronTexaco rights to explore a section of Cambodian waters in the Gulf, but it’s too early to tell if the government will earn revenue from it, Cambodian National Petroleum Authority Director-General Te Duong Dara said Thursday.
ChevronTexaco must first explore the area, which lies about 150 km southwest of Sihanoukville. The process can take up to 10 years before production begins, Te Duong Dara said.
According to a press release from ChevronTexaco, Chevron Overseas Petroleum (Cambodia) Ltd received a 70 percent interest in the so-called Block A, which covers 6,278 square km in the Gulf. The remaining 30 percent was given to a subsidiary company of Mitsui Oil Exploration Co, Ltd.
“We are excited about the opportunity to explore this area,” said Keli Taureka, ChevronTexaco’s managing director of the Asia South business unit.
A ChevronTexaco executive arrived in Phnom Penh earlier this week, but declined to discuss the agreement, referring questions to the corporation’s public relations office in Bangkok.
The deal is a “good signal” for future revenues from oil and gas deposits in the Gulf of Thailand, Funcinpec National Assembly member Kim San said Thursday. As chairman of the assembly commission of Public Works, Transport, Telecommunications, Post Industry, Mining, Energy and Commerce, Kim San has oversight responsibilities over petroleum projects.
In recent years, four other major oil companies have explored but then chosen not to drill in Cambodian waters, saying the fields woud not produce enough profit.
The government now earns about $9 million a year from oil and gas concessions—even if it is unclear where that money goes, Kim San said.
By law, revenues should go to the Ministry of Finance, but parliamentary attempts to clarify what happens to oil and gas concessions money have met with failure, Kim San said.
ChevronTexaco is already looking for oil in three other blocks located in a so-called “overlap zone” in the Gulf of Thailand, an area of disputed control between Thailand and Cambodia. Production in the overlap zone has been slowed by the inability of the two governments to agree on a sea border.
In June, 2001, Thai Prime Minister Thaksin Shinawatra and the Cambodian government signed an agreement stating no drilling would be allowed in the disputed area until there was a border settlement. If the two countries do decide to allow drilling to begin before settling the border dispute, they would split any profits equally, according to the agreement.
ChevronTexaco already has a business interest in Cambodia, having established Caltex Cambodia Ltd in 1995.
(Additional reporting by Kay Kimsong)