International Research Center for Energy and Economic Development: Cambodia could be the world's next great petroleum resource

Analysis: Cambodia oil, blessing or curse?
Posted on : 2006-12-20 | Author : Energy Analysis Editor
News Category : Environment


By CARMEN J. GENTILE The buzz about Cambodia's petroleum potential has
many energy firms chomping at the bit to begin drilling, though some
predict that the blessing of black gold will be a curse in disguise for
a nation that's experienced its share of hardship.

Leading the charge toward full-scale extraction operations is U.S. oil
company Chevron, which in the last year sunk many exploratory wells and
is reportedly eager to begin offshore drilling in the Gulf of Thailand.

According to the World Bank, Cambodian reserves could contain as many
as 2 billion barrels of oil and 10 trillion cubic feet of gas, which
would make Cambodia the next untapped hot spot for multinational oil
players. Depending upon the world price of oil, Cambodian reserves may
be contributing annual revenues of $2 billion per annum -- several
times the current level of domestic revenue and ODA [overseas
development aid] combined -- within perhaps five to 10 years, read a
recent World Bank report. With that in mind, Chevron and other oil
giants are beginning to turn their attention toward Cambodia.

Energy firms will be eager to capitalize on what could be the world's
next great petroleum resource, Dorothea EL Mallakh, director of the
International Research Center for Energy and Economic Development, told
United Press International. El Mallakh's prediction of increased
interest comes with a caveat, however, a warning that Cambodia ought to
be wary of the pitfalls often associated with petroleum wealth.Event
the World Bank has issued warnings.

International experience suggests that such petrochemical wealth may
equally well result in a are source curse' that actually retards
development and poverty reduction.Before inviting the world oil
companies, Cambodia might want to take a closer look at other nations
that have done the same, such as Nigeria.

Nigeria, which has the highest oil production in Africa, is straining
under the oil curse amid a growing militancy, which has targeted oil
installations, and environmental risks. Cambodians could easily follow
Nigeria's footsteps.

Prime Minister Hun Sen has been accused of traditionally showing little
interest in the rights of his people and earlier this month a leading
human rights group accused the Cambodian government of interfering with
ongoing preparations in the trial of former Khmer Rouge officials.

The Khmer Rouge regime (1975-1979) -- led by Pol Pot -- is accused of
killing almost 2 million Cambodians during their short-lived reign.

International legal officials have expressed dismay with Cambodian
authorities, with whom they are trying to draft legal parameters for
the trial, saying the Cambodians appear unwilling to cooperate so the
trials can commence.

Political interference has brought the whole process to a screeching
halt, said Brad Adams, Asia director of Human Rights Watch. (Comments
to energy@xxxxxxx)


PHNOM PENH, Cambodia, Dec. 18 (UPI)

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