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Total confirms $8m social fund

Total confirms $8m social fund

FRENCH energy company Total confirmed Thursday that it paid the government US$28 million, including $8 million for a “social development programme”, to secure rights to drill for oil offshore in an area claimed by both Thailand and Cambodia.

Penelope Semavoine, a Total spokeswoman in Paris, said Thursday the company had signed the agreement in October with the Cambodia National Petroleum Authority (CNPA) to explore the 2,430-square-kilometre offshore block designated Area III. The company, she added, paid a $20 million signature bonus to the CNPA in January and is planning an $8 million social development fund.

Prime Minister Hun Sen referred to the Total deal in a speech at the Government-Private Sector Forum in Phnom Penh on Tuesday. Rebutting media reports that mining giant BHP Billiton paid bribes to the Cambodian government, the premier said the firm had merely contributed to a social development fund. Total, he noted, “also paid this kind of money”.

Speculation has seized on Cambodia as the origin of an ongoing graft inquiry at BHP in part because of a $2.5 million payment to the government that the company said was for a social fund but that Minister of Water Resources Lim Kean Hor described in 2007 as “tea money”, or an unofficial fee.

Semavoine said Total’s $8 million social fund payment will be “administrated by committees that will include representatives from the CNPA and Total”.

“That will be a social development programme aimed at improving general health, education, culture, and welfare for the people of Cambodia,” she said. Exploration of Area III, she added, will not be undertaken until Cambodia and Thailand reach an agreement on their maritime boundaries.

A deal for the onshore Block 26, which covers an area of 22,050 square kilometres from Phnom Penh to the Vietnamese border, is still under discussion, Semavoine said.

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