Phnom Penh
Tuesday, 04 May 2010
[Editor’s note: Eight years after Chevron found crude oil off Cambodia’s coast, the American company has yet to begin full production. In remarks in April, Prime Minister Hun Sen said he wants the oil giant to begin production by 2012 or risk losing its rights. Michael Walter, an adviser to the National Petroleum Authority, has 30 years of experience in the oil industry, including with the World Bank and Asian Development Bank. In an interview with VOA Khmer in Phnom Penh, he says things are not so simple.]What has caused Chevron to delay offshore oil production for so long?
The question of development is always linked around commerciality. You can’t forget the fundamentals of geology and economics when you are dealing with the oil business. In Cambodia, it has been marginal, not quite enough to make it commercial, not quite enough to make it development. Contrarily, in Ghana, they discovered oil more recently and already they have put it into development of production very quickly, but it is very large—some 1,000 million barrels.
But the resources that have been identified in the offshore areas of Cambodia are much smaller and cut up with small pockets, which makes it very difficult to develop. Remember that an oil company tends to pursue big oil. If they find a big oil field, they are often prepared to throw more money at it to start production. If things don’t look so attractive, then of course the company isn’t so inclined to make production. However, it is very important for Cambodia because the economy here requires more input for development.
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