Page 2 of 2 Cambodia, Thailand
struggle over
petroleum By Andrew Symon
gain
transit fees and other benefits such as further
gas for its power generation instead of importing
via expensive liquefied natural gas. Thailand
would also gain more through displacement of
imported oil. Thailand imports almost all of its
oil supplies.
The ultimate position of
companies allocated blocks by the respective
governments is unclear. The Cambodian awards were
made in 1997 conditional to a resolution of the
dispute. The Thai
awards were made in the late
1970s, and legal opinion is that these may be in
force majeure.
Achieving a
breakthrough Government officials from both
sides meet three or four times a year under the
terms of the 2001 memorandum of understanding, but
it appears little progress is being made now.
Clearly the uncertainties in Thailand
after the coup last September against the
government of Thaksin Shinawatra are not helping.
Until there is a new constitution and new
government to succeed the present
military-directed caretaker administration, the
Thais will not make any commitments.
Under
Thaksin, there were some signs that he may have
been able to bite the bullet and force an
agreement through his bureaucracy. This would have
been consistent with Thaksin's wider plans for a
Thai-centered economic-development thrust for the
Thailand-Indochina region, called the
Ayeyawady-Chao Phya-Mekong Economic Cooperation
Strategy. And blueprints prepared under him did
include schemes for OCA development.
Recourse to the International Court of
Justice in The Hague is not an option, it seems.
Both sides must be prepared to submit their cases
for judgment, and this is very, very unlikely to
happen because the Thais remember the last time
they went along with this way of doing things -
they lost their claim to the ancient Khmer temple
of Preah Vihear, which is just inside Cambodia's
northern border with Thailand.
That issue,
like the OCA matter, had its origins in borders
determined by the French colonial government with
Siam. In 1954, the year after France granted
independence to Cambodia, the Thai military (Siam
was finally renamed Thailand in 1949) seized the
temple from Cambodia. The then prime minister,
Prince Sihanouk, took the matter to the
International Court in 1959. The Thais were also
prepared to have their case heard.
But to
Bangkok's chagrin, the court ruled in Cambodia's
favor in 1962. Cambodia did have some substantial
legal counsel. One of those representing Phnom
Penh was Dean Acheson, who was secretary of state
(1949-53) in the administration of US president
Harry Truman. The current failure to unlock the
OCA is lamentable. On Bangkok's side, there should
be keenness to resolve the issue, given Thailand's
own need to find new gas supplies for domestic
power generation and oil to offset its growing
oil-import bill.
And for Cambodia, one of
the world's poorest countries, revenue from the
petroleum development would, of course, be a
blessing if it enabled the government to finance
more infrastructure and health and education.
At this prospect, there are, however,
plenty of cautionary voices from multilateral
organizations and international NGOs warning about
the risk of Cambodia squandering such riches
through bad management, poor economic policy and
corruption.
Phnom Penh has no shortage of
advice. But perhaps it would be better first to
work out how the OCA problem might be resolved,
especially if the Chevron finds on Block A are
less than were once hoped.
In any case, an
OCA joint development scheme should be attractive
to those who are worried about the use of
resources revenues. As one petroleum lawyer says,
a joint development area would have to offer
transparency as there would be an overarching
treaty signed by both countries to govern
operations. There would be a regulatory framework
set down, a joint authority to manage it, and
reports of operations and revenues made to both
governments.
There are examples of how
this can work. The joint development area between
Thailand and Malaysia in the southern part of the
Gulf of Thailand has been supplying gas to
Malaysia since last year and is set to supply gas
to Thailand from about 2008.
Then there
are the joint development treaties between
Australia and East Timor. While the determining of
splits for the contested areas has been a
controversial process since Timor succeeded
Indonesia as the treaty partner upon independence
in 1999, this now seems to be bedded down.
Under one joint development arrangement,
covering the producing Bayu Undan gas and
condensate field, East Timor gains 90% of
government revenue. A more contentious deal was
for the Greater Sunrise gas fields, yet to be
developed, where a 50:50 split was finally agreed
on.
The outcomes reflect both East Timor's
legitimate border claims and the view in Canberra
that such splits would be an effective way of
ensuring that the tiny new state has access to
revenues and will not be forever reliant on
multilateral and bilateral handouts - including
those that would come from Australia.
Australia did not reach this position
without difficult negotiation with the Timorese
and its United Nations advisers, and there was
domestic and international NGO pressure on
Canberra to provide East Timor with a better deal
over Greater Sunrise than Australia had first
proposed.
The Thai-Cambodian OCA situation
is perhaps not so different. Yet there does not
seem any wider debate and concern as to what
responsible position Thailand could take if it
wished to assist the development of its much
poorer neighbor and promote economic cooperation
in the Mekong region.
Andrew
Symon is a Singapore-based journalist and
consultant specializing in energy and
resources.
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