The US oil giant ChevronTexaco Corp expects to begin drilling in February next year for oil and natural gas off Cambodia’s coast, Cambodian officials said.
“Development of oil and gas in Cambodia has enormous potential for the far-sighted investor,” said Minister of Cabinet Sok An, who also chairs the Cambodia National Petroleum Authority.
Cambodia signed an agreement with ChevronTexaco Thursday that will allow the company to begin drilling in an area covering 6,278 square kilometers—the first effort in four years to tap what many experts think is a vast oil field .
A total of nine exploratory wells were drilled between 1991 and 1998, with three wells turning up crude oil.
ChevronTexaco will drill in an area previously drilled by other companies, though without much success.
“We…will be looking at the data very carefully to minimize risk…to get the best chances possible for success,” said George Kirkland, president of ChevronTexaco Overseas Petroleum.
Oil exploration has been dogged by an ongoing dispute between Thailand and Cambodia over suspected oil fields in the Gulf of Thailand.
But in March, the US State of Texas-based company’s Cambodian unit, Chevron Overseas Petroleum Ltd, won a concession from the government for the production of oil and gas in a section of the Gulf of Thailand.
ChevronTexaco received a 70 percent interest in the area while the remaining 30 percent was awarded to Mitsui Oil Exploration Company of Japan.
The section is adjacent to three exploration areas that are jointly claimed by Thailand and Cambodia, the company said in an earlier statement.
Petroleum Authority official Men Den said that although smaller companies had probed the area in recent years without success, the larger, better financed explorers stood a better chance of locating petroleum resources.
Men Den said he didn’t know the cost of the project, but that it would cost the company billions of dollars to extract any oil or natural gas found.
“The oil business is like gambling,” he said. “Win, lose, win, lose. But if you win, you become a billionaire.”
The company will recover its exploration costs before sharing any profits with the government, officials said.
ChevronTexaco has invested in Cambodia through its Caltex brand of gasoline.
(Additional reporting by the Associated Press)