Cambodian offshore oil deposits may exceed expectations

Jan 15, 2007, 12:51 GMT

Phnom Penh - Cambodian offshore oilfields may yet yield millions of barrels more oil than previously estimated, a senior government official said Monday.

Speaking at a seminar in Phnom Penh on the country's oil and gas assets, Cambodian National Petroleum Authority director-general Te Duong Tara said exploration by US oil giant Chevron in its Block A allocation alone indicated that its initial estimate of around 400 million barrels had been too conservative.

Block A is one of six demarkated areas. Japanese, Chinese, South Korean, Malaysian, Indonesian, Singaporean and Thai interests are also involved in Cambodian offshore oil exploration, Tara Said.

'According to estimates before drilling five wells we said that Block A has perhaps 400 million barrels and three to five GPS of gas. This was the previous estimate, but a subsequent tendency increases that from 400 to 700 million barrels,' he said.

'Chevron is still drilling. It has not announced the final figure yet. I think maybe in May or June we can know about everything and talk about a real figure.'

Chevron is the largest investor in Cambodian offshore oil reserves, Tara said, and has so far poured around 130 million dollars into exploration.

With Block A the only block so far to be significantly explored, it remained unclear whether other blocks would also yield higher than previously estimated, and if so by how much.

Investment opportunities in the country's offshore blocks were all but closed, Tara said, and negotiations with a final small Chinese company he declined to name looked set to fill available slots there.

However Tara said Cambodia's oil boom was only just beginning and the government was already looking at exploring significant potential onshore reserves in a range of provinces including central provinces of Kampong Chhnang and Pursat, as well as Kampong Thom and the Thai border provinces of Battambang and Preah Vihear.

'Including Total and a European company there are already five or six international companies negotiating with the Cambodian government on this potential,' he said.

Tara said the Cambodian government was taking a long-term view to oil investment regarding its potential to boost the national economy but lacked the finances to develop its oil and gas reserves without foreign investment.

'Cambodia is poor. Finding oil provides huge potential for the national economy. We intend to use this revenue for the purposes of our national interest,' he said.

World Bank estimates had previously put Cambodia's total offshore oil potential at up to 2 billion barrels, the extraction of which the United Nations Development Program has said could potentially double the nation's annual GDP and significantly reduce the country's current dependence on foreign aid.