CAMBODIA is watching anxiously as foreign drillers search off its coast for oil.
The Kingdom is pinning part of its hopes on joining the booming economic growth of
Asian neighbors on oil revenues.
"We will be very hopeful that a discovery of these natural resources brings
in hard currency," Industry, Mines and Energy Minister Pou Sothirak said.
Oil explorers have been encouraged in their search by geological factors, pointing
to the success of Thailand's gas industry in waters with a similar structure.
In 1991 explorers returned to Cambodia after a 20 year hiatus. Test drillings and
surveys have been promising enough to prompt further examination.
But commercial production is far from certain and the pace of exploration stumbled
last year when the government withdrew three exploration areas from tender. More
recently the government has created ten blocks in the center and south, of which
some are likely to be launched in June or July.
Sothirak said 1996 would prove significant for oil prospects in Cambodia as the three
consortia operating in the country launch fresh tests.
The government has already said it is mulling plans to set up a national oil company
to look after national interests if the offshore finds prove commercially viable.
With just four wells drilled so far, three of which hit oil and gas, the Cambodian
exploration process is in its infancy.
Declan Ryan, an analyst with the international oil and gas consultants Wood Mackenzie,
said test results to date indicated optimism.
"They've demonstrated that there are hydrocarbons, the question is really whether
it's commercially viable," Ryan said by telephone from Edinburgh, Scotland.
Hugh Leonard, Cambodia general manager for British group Enterprise Oil, said explorers
needed to drill several more wells before being able to assess if the sites could
be launched commercially.
"If the results continue to be extremely encouraging... the earliest we would
get [to commercial drilling] would be in a few years time," he said.
Enterprise has a 50 percent stake in two offshore blocks, with France's Total Cambodge
Exploration Ltd. holding a 30 percent stake and British Gas Exploration and Production
Ltd. holding the balance.
Last month Enterprise dispatched the Canmar Explorer III to drill the Da-1 and Preah
Kahn wells, bringing its total investment in Cambodia to $40 million.
"We are excited at the results from the first well and we are committed to drilling
more wells. The results of today are very encouraging," Leonard said.
A Japanese consortium - Cambodia Petroleum Exploration Co Ltd (CAMPEX) - has so far
had mixed results after spending $40 million on exploration. CAMPEX is preparing
a third test drilling at its Poulo-Y well next October or November.
Several exploration companies are looking to explore waters claimed by both Cambodia
Los Angeles-based Unocal Corp. said it is ready to invest $100 million in the search
for oil and gas in the overlapping area. In January Australia's BHP Petroleum opened
an office in Phnom Penh with a view to exploring the same area.
Thailand awarded blocks in the area years ago and while Cambodia has taken bids on
blocks it has created in the disputed area, talks between the two countries to resolve
the claims have developed slowly.
Wood Mackenzie's Ryan said it took 20 years for Thailand and Malaysia to reach and
agreement in their joint development area so he did not expect a quick resolution
in this dispute.
"It is viewed that it will be several years before it's resolved," he said.