Monday, April 19, 2010

Cambodian PM gives Chevron ultimatum on oil

PHNOM PENH, Cambodia

The Associated Press April 6, 2010, 8:06AM ET


Prime Minister Hun Sen pressed Chevron Corp. on Tuesday to get crude flowing from this impoverished country's first major oil discovery, threatening to cancel its rights to the offshore site if production does not start by 2012.

Hun Sen's announcement reflected the government's urgency about reaping oil revenues it says will help to finance develop and reduce poverty.

Chevron drilled 15 wells in 2007 at the site, Block A, west of coastal Preah Sihanouk province, and says it is evaluating its commercial potential.
"We have given a deadline to the Chevron company to produce oil by the end of 2012. If not, the contract will be terminated," Hun Sen said at a graduation ceremony on the outskirts of the capital, Phnom Penh.

A spokesman at Chevron's regional headquarters in Singapore declined to comment on Hun Sen's remarks without knowing their full content.
However, Chevron said in a statement that it is "aligned with the Royal Government of Cambodia's desire to see production from Block A as soon as economically possible. The first oil date is reliant on a successful exploration program, and is dependent on achieving key milestones."

Companies from Australia, China, France, Indonesia, Malaysia, Singapore and South Korea also have expressed interest in exploring Cambodian waters for oil.
Critics have expressed concern that oil income could exacerbate Cambodia's already rampant corruption if the government fails to develop a proper legal environment to manage the expected windfall.

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