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PHNOM PENH: Cambodian Prime Minister Hun Sen announced on Tuesday (December 29) that the kingdom had extracted its first drop of crude oil from its waters, a long-awaited milestone for one of the poorest nations in Southeast Asia.
The Gulf of Thailand has significant oil deposits, and Chevron first found proven reserves off Cambodia in 2005.
But production stalled because the government and the US giant failed to reach a revenue-sharing agreement, prompting the company to sell its stake to Singapore’s KrisEnergy in 2014.
Hun Sen hailed the first oil extraction as “a new achievement for the Cambodian economy.”
“The first drop of oil has been produced.”
“The year 2021 is coming … and we have received a great gift for our nation: the first oil production in our territory,” he said in a Facebook post.
The crude was extracted from an area off the southwest coast of Sihanoukville.
Chevron’s discovery of the reserves led the kingdom to be considered the next potential petro-state in the region, and the government estimated that hundreds of millions of barrels of crude were under its waters.
KrisEnergy currently has a 95 percent stake in the block from which the oil was extracted, with the government holding the remainder.
The company expects a peak production rate of 7,500 barrels per day from an early stage, a modest amount compared to neighboring oil-producing Cambodia, Vietnam and Thailand.
But the revenue could be significant for the government, which estimated in 2017 that it would get at least $ 500 million in royalties and taxes from the project’s first phase.
The discovery also raised concerns about how Cambodia, a country long classified in terms of transparency, would use its newfound wealth, but Hun Sen, Asia’s oldest leader, dismissed them, calling the extraction “a boon” for the Cambodians.
“It is not a curse as some ill-willed people have cited it,” he said.
