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2 ASIA
HAND Cambodia's coming energy
bonanza By Shawn W Crispin
BANGKOK - If the United Nations, World
Bank and Harvard University are to be believed,
Cambodia is poised to become a major new global
energy exporter, with a fossil-fuel windfall that
promises to double the country's current gross
domestic product (GDP) and potentially lift
millions of Cambodians out of poverty.
US
oil giant Chevron has indicated a huge oil-and-gas
find off Cambodia's south coast, where it has
reportedly hit black in four
out of
five well tests. Cambodian energy official Te
Duong Tara last week estimated that the
6,278-square-kilometer Block A that Chevron is
drilling could contain as much as 700 million barrels
of oil, or nearly twice the earlier 400-million-barrel
estimate.
The World Bank has said
that Cambodia's total energy reserves may be as high
as 2 billion barrels of oil and 10 trillion
cubic feet of natural gas. Depending on future
world prices, fuel exports could generate
annual revenues upwards of US$2 billion, or several
times the current combined amount that Cambodia generates in
domestic revenues and receives in foreign aid, the
bank has said. Meanwhile, Cambodian energy
officials indicated this week that they hope to
ramp up production as early as 2009, three to
seven years earlier than the World Bank projected
as feasible.
Those gushy projections have
multinational oil companies lining up to win
exploration licenses and production agreements for
the other five blocks designated by the
government. Competition is hot for the rights to
drill the 6,557-square-kilometer Block B, where
France's Total SA and China National Offshore Oil
Corp (CNOOC) are reportedly dueling over the lead
contract. Japanese, South Korean, Kuwaiti, Thai,
Malaysian and Singaporean energy companies are
also reportedly bidding on exploration stakes -
though it's unclear whether the Cambodian
government plans to field bids for all six
maritime blocks.
The potential capital
investment and future joint production agreements
promise to transform Cambodia from a net fuel
importer into a major regional, if not global,
energy player. Depending on the size and
accessibility of the proven reserves,
energy-export revenues could soon double
Cambodia's current GDP, according to a joint study
last year by the United Nations Development
Program and Harvard University.
To be
sure, Cambodian officials could be hyping Block A
to spark investor interest in potentially less
promising concession areas. Other multinational
oil companies have drilled and come up dry at the
same Block A where Chevron has reportedly tapped a
gusher. Yet Chevron has so far remained mum about
its actual findings, which the company will reveal
publicly in either April or May. Moreover,
Cambodia has a poor record of getting its proven
reserves out of the ground and on to the market,
including its inability to reach a joint
development agreement with Thailand for a rich
natural-gas field overlapping both countries'
territorial waters.
Fuel wars Yet the broad consensus is that Cambodia is
probably on the verge of an oil-and-gas bonanza.
An energy-rich Cambodia would appreciably
enhance the war-torn country's geostrategic
significance, particularly as the United States
and China aggressively joust for access to new
fuel sources around the globe. It is relevant that
a US oil company made Cambodia's initial find, and
perhaps even more significant that a Chinese
energy firm has lobbied heaviest to win majority
rights to the geographically adjacent Block B,
where a small Chinese software outfit has quietly
helped local energy authorities conduct so-called
"logging" seismic tests.
Beijing is in hot
pursuit of any new Asia-based energy sources that
would allow its fuel shipments to bypass the
congested Malacca Strait, through which nearly 80%
of its oil imports now flow. Chinese leaders have
openly expressed their worries that in a potential
conflict, US naval vessels could block China's
fuel imports from the Middle East at the narrow
channel that separates peninsular Malaysia and the
Indonesia island of Sumatra.
Indeed,
China's spurned $18.5 billion bid in 2005 to
acquire US oil giant Unocal was strategic-minded
considering that the majority of the targeted
firm's reserves were in Asia - a point US Congress
members made to block the deal. So from China's
perspective, security concerns put a high premium
on Cambodia's nearby newfound resources.
Beijing has recently intensified its
already strong charm offensive aimed at Cambodia,
which in recent years has seen Chinese aid
distributed to build key infrastructure and even a
shiny new Council of Ministers building in Phnom
Penh. Last year Prime Minister Hun Sen requested
and will likely receive $200 million from China
for infrastructure projects. On January 18, a
"goodwill" delegation from the Chinese Communist
Party met and held
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