Cambodia and Thailand finalise oil revenue sharing agreement

Aug 10, 2006, 11:56 GMT

Phnom Penh - Cambodia and Thailand have come to an agreement on oil share revenues as drilling is set to begin in the potentially extremely rich but disputed oil and gas reserves between the two in the Gulf of Thailand, a Cambodian official said Thursday.

Cambodian government spokesman Khieu Kanharith told a press conference to mark the departure of Thai caretaker Prime Minister Thaksin Shinawatra's whirlwind one-day visit that the neighbours had agreed to adopt the model South Korea and Japan had forged to split revenues and had cordially signed off on the deal.

'In the central area, the two sides will share revenue 50-50. In areas close to Thailand, Thailand will take 85 per cent and Cambodia 15 per cent. In areas close to Cambodia, Cambodia will take 85 per cent and Thailand will receive 15 per cent,' Kanharith said.

Thaksin told reporters the finalization of the boundaries would be complete within six months.

The agreement represented an important breakthrough. During their last talks, the two countries could not agree on the matter of benefits sharing as Thailand offer Cambodia only 10 per cent from the disputed so-called Joint Development Area which lies between them in the Gulf of Thailand but Cambodia demanded a 60 to 40 per cent share.

Cambodian state television Wednesday night announced Block A of a number of potential drilling sites had been estimated to contain a yield around 700 million barrels of oil, but that other reserves had not been fully explored yet.

Full-scale drilling is expected to begin within two years and US oil giant Chevron has already moved equipment into Cambodia in anticipation for exploratory research. The Cambodian government is looking to revenues from oil and gas to reduce its heavy dependency on foreign aid.

Kanharith said the two nations had also discussed the issue of borders, including sea borders, but that Cambodia had decided to ask the advice of other nations with experience in this area before committing itself, such as those in northern Europe.

Thaksin said little on his way to board the plane, except to say he was very pleased with the talks with Prime Minister Hun Sen and other senior ministers, and that he believed they had produced 'good results.'

Earlier in the day, Thaksin also pledged millions in aid for the Cambodian infrastructure, including a highway which will help link Bangkok and Phnom Penh.

Accompanied by Hun Sen to the plane, he appeared not to hear a question on whether he had also discussed personal business matters during his trip, which also took in an audience with King Norodom Sihamoni.