THE Government has confirmed it is in negotiations with controversial British-based
businessman Mohamed al-Fayed to allow his company "Harrods Energy" to drill
for oil next to the Tonle Sap.
The Tonle Sap is the source of 70 per cent of Cambodia's protein.
Cambodian National Petroleum Authority director Te Duong Dara said that al-Fayed
flew into Phnom Penh for a private meeting with Prime Minister Hun Sen on March 21
to discuss the purchase of the oil concession.
Al-Fayed was accompanied by the wife of former Thai Prime Minister Chavalit Yongchaiyudh
for his two-hour meeting. The pair flew in from Thailand on al-Fayed's corporate
jet.
Al-Fayed is the owner of the exclusive London department store Harrod's.
The meeting was requested by al-Fayed through Sok An, Minister at the Council of
Ministers.
Dara said the areas that are being looked at for the drilling program are to the
west of Tonle Sap, including Battambang, Pusat, and Kampong Chhnang. He said they
would not be drilling on the lake bed itself.
He said negotiations are now proceeding and that they had forwarded technical information
on the proposed areas.
Dara said that initial investigations had indicated two large, deep subterranean
basins that could contain either oil or gas but further investigations were needed.
He said that further test work would be needed to be done before they could say if
commercial quantities of petrochemicals could be harvested from the area.
"There needs to be seismic investigation in both two and three dimensions which
could take six months to a year because, as you know, with the rains in Cambodia
we cannot work all the time," he said.
The Post understands that foreign drilling companies have already been approached
to undertake a seismic evaluation and were initially asked to begin drilling by the
end of May.
Seismic evaluations involve drilling a series of shallow holes, loading them with
explosives, detonating them, then measuring the echoes.
The best indicator of the extent of the petrochemical resources there would be a
test well, which Dara said could be several years away.
Dara said they were satisfied that Harrods Energy had the expertise to carry out
the work and develop the industry.
He pointed to Harrods Energy's activities in Thailand, where it has taken over a
number of concessions from the Thai oil company PTT.
Dara said that of the 10 test wells drilled in Thailand by Harrods Energy, five struck
oil, which is a high percentage.
However not everyone in the Government has been happy about al-Fayed's involvement.
One Government official said that at the meeting with Hun Sen, al-Fayad had "bragged
about what he was going to do for Cambodia's oil industry" but he did not have
the technical knowledge of the subject.
"If he was coming here to tell us he was going to open a Harrod's department
store we would have listened more carefully," the official said.
He added there were concerns about al-Fayed's links to the international arms dealer
Adnan Khashoggi. Al-Fayed and Khashoggi are brothers-in-law. Khashoggi also was once
wanted in Thailand over the disappearance of a large quantity of money from a Thai
bank.
Born in Egypt, al-Fayed has been trying for years to become a British citizen. However
he has become embroiled in scandals, including paying MPs to ask questions in the
House of Commons, bugging employees, and being accused of theft by the late Tiny
Roland after his Harrod's safety deposit box was rifled.
There are also concerns about the wisdom of drilling for oil next to the Tonle Sap
lake - a key breeding ground for fish in Cambodia.
A spokesman for one local environmental NGO said there was an enormous risk of destroying
the most important ecological area in Cambodia if there was an oil spill in the lake's
catchment area.
He said he could see the financial attraction of such a project but doubted it was
worth it.
"The project is good for the Government but it will not benefit the community,"
he said.
