Cambodia to begin regional energy security discussions with ASEAN in July during meeting in Myanmar, govt confirms
A vendor sells petrol by the side of a road in Phnom Penh in this file photo. Cambodia currently imports all its oil products.
IN July, Cambodia is to meet with other ASEAN member nations, as well as China, Japan and South Korea, in Myanmar to discuss an energy security plan that will involve an "oil stockpiling roadmap", Ith Praing, secretary of state at the Ministry of Industry, Mines and Energy, said Wednesday.
"The oil-stockpiling roadmap is a way to avoid an oil shortage once a crisis happens. They [ASEAN] are afraid that if there is a natural disaster or a war ... a country would have an oil shortage, [but with oil stockpiles] then the others could help," Ith Praing told the Post.
The draft of the oil road map should be ready for discussion by late July, he added.
At the moment, the proposed amount of oil to be stockpiled by Cambodia has not been specified, but experts say any improvement to the Kingdom's oil security could help its economy in the long term.
Cambodia imports all of its oil derivatives, a situation meaning it is particularly important to have a security stockpile because it cannot fall back on domestic production, Ith Praing said.
Cheam Yeap, a Cambodian People's Party lawmaker, said Tuesday that Cambodia expects to start extracting oil in offshore Block A - for which US oil company Chevron is negotiating an extension of its exploration licence - between 2011 and 2013. Until then, it will have to rely on international suppliers.
Victor Jona, the deputy director general at the Ministry of Industry, Mines and Energy, said that Cambodia had no oil security plan, but by participating in the ASEAN energy security meeting in July, it would develop a long-term strategy.
"As long as we have oil reserves, we can plan for our economy in the long term," said Jona, adding that "whatever ASEAN does, we will do the same".
Little in reserve
Currently, Cambodia maintains a 30-day oil reserve, according to Bin May Mialia, a petroleum analyst.
A Cambodian petroleum expert who asked to remain anonymous said that rich countries will maintain oil stocks that will last five years as a way to insulate themselves from high oil prices.
As long as we have oil reserves, we can plan for our economy in the long term.
"When petroleum is cheap, they buy it for their oil reserves," he said.
"But for a country like Cambodia, the price of gasoline goes up and down quickly depending on international oil prices."
He said that increased state control and large reserves can help ensure a country's energy security by avoiding the turbulence of the market, but at the moment, Cambodia's oil suppliers are all private companies.
Bin May Mialia said that in addition to oil stockpiles, the meeting would discuss other energy-securities issues such as renewable energy and environmental standards.