The Cambdoge extracts oil for the first time in its history

The Cambdoge extracts oil for the first time in its history

The Prime Minister hailed a “success for the economy” of his country, while his Thai and Malaysian neighbors have already been exploiting hydrocarbon resources in the Gulf of Thailand since the 1980s.

Cambodian Prime Minister Hun Sen during the inauguration of a bridge on October 26, 2020 in Phnom Penh.  (TANG CHHIN SOTHY / AFP)

Cambodian Prime Minister Hun Sen announced Tuesday, December 29, that the country had extracted oil for the first time in its territorial waters. This step was long overdue in this country, which is one of the poorest in Southeast Asia. “The first drop of oil has been produced”, he wrote on Facebook, greeting “Another success for Cambodia’s economy”.

In power for 35 years, Hun Sen has brushed aside concerns about the transparent and wise use of this new wealth. This is “A blessing” for Cambodians, he assured, “It is not a curse as has been said by some malicious people”. The crude was mined from an area off the coast of Sihanoukville in the south of the country.

Some 7,500 barrels produced per day

Neighboring Thailand and Malaysia have already been exploiting the hydrocarbon resources of the Gulf of Thailand since the 1980s. Cambodia is behind schedule and Phnom Penh did not sign a contract with a Singaporean company, KrisEnergy, until 2017. The latter currently holds 95% of the concession where the oil was extracted, the rest belonging to the government.

Officials from the Singaporean group KrisEnergy shake hands with Cambodian Energy Minister Suy Sem on August 23, 2017, after the signing of a contract between the two parties.  (TANG CHHIN SOTHY / AFP)

The company initially expects maximum production of 7,500 barrels per day, a modest figure compared to production in Thailand or Vietnam. But the revenue could be significant for the government, which estimated in 2017 to be able to withdraw at least $ 500 million (409 million euros) in royalties during the first phase of the project.