Friday, 5 December 2008

US Oil Company Pays US$120 Million to Buy Oil Exploration License for Explorations at the Bottom of the Khmer Sea - Thursday, 4.12.2008

Posted on 5 December 2008
The Mirror, Vol. 12, No. 589

“It is reported that Chevron, a US big oil company, had paid US$120 million into a social development foundation of the Hun Sen government, in order to receive the concession to explore oil in one of the six blocks in the Sihanoukville sea.

“The report added that an Indonesian company, Medco International Petroleum, spent US$4.5 million to buy a license to do undersea oil exploration in the Cambodian sea, by cooperating with its partners from Kuwait and from Sweden that had also signed agreements with the National Petroleum Authority of Cambodia [as an exception in his context, no Internet website for the National Petroleum Authority of Cambodia could be found – see, however, The Mirror of 10 June 2007]. This license depends on a model contract that the National Petroleum Authority of Cambodia had provided for the first time for Block A to Chevron in 2002. This contract talks about the sharing of benefits with the Cambodian government, and about the taxation rate on oil income.

“When asking the Minister of Information, Mr. Khieu Kanharith, about these problems by telephone, he advised to talk to Deputy Prime Minister and Minister of the Council of Ministers Sok An, who directly administers the National Petroleum Authority of Cambodia. After contacting his office by telephone for an interview, a man who received Deputy Prime Minister Sok An’s phone, said that the Deputy Prime Minister was busy.


“While the US Chevron company was already drilling to explore oil in Block A, the National Petroleum Authority of Cambodia and the cabinet of Minister Sok An provided licenses to other companies to explore oil at different blocks as follows:

- Block A: This block was contracted to Chevron of the United States, and it is believed to have the most oil and gas deposits. In Block A, Chevron has a 55% stake; the partners of this company are Mitsui Oil Exploration, having 30%, and Caltex with 15%. At present, those companies are drilling for oil at fifteen places and are considering to drill even more. According to the National Petroleum Authority of Cambodia, Chevron and its partners have invested US$120 million.

- Block B: It is far from Sihanoukville and it was contracted to the Singapore Petroleum Company cooperating with a Malaysian oil company [Petronas?] and the Thai oil company PTT. Each company has one third stake. The Singaporean company and its partners have invested US$1 million, and they will invest US$2.5 million more when oil deposits are found in this block.

- Block C: This block was contracted to Polytec of Hong Kong. The National Petroleum Authority of Cambodia announced that 100% of the rights were given to the Polytec company only, there are no partners.

- Block D: According to the publication of an Indonesian newspaper, first, the license of this block was contracted to China Zheng Rong Cambodia Energy, but then Block D was transferred to China Petrotech Holding that bought the 48% stake from the Zhen Rong company. Petrotech Holding has invested US$4 million in Block D, and plans to spend another US$2 million of its US$4 million to explore oil for the first time in this block.

- Block E: This block is located next to the Western border of a disputed region with Siam [Thailand] and it was contracted to the Indonesian Medco International Petroleum company, which has a 41.25% stake, Kuwait Energy has 20%, JHL Petroleum with 4.13%, and a Swedish company has 34%. For this Block E, Medco of Indonesia had paid US$4.5 million to a social development foundation of the Cambodian government.

- Block F: This block was contracted to China National Offshore Oil, a big oil company, and it was signed with the National Petroleum Authority of Cambodia a few months ago. Details about the agreement and plans for this block are not shown. “The Director-General of the National Petroleum Authority, Mr. Te Duong Dara, refused to be available for a direct interview over the provision of licenses and the payment by all oil exploring companies to the government.

He added that - because now there are disputes over taxation laws on oil that is found at the bottom of the sea - we have not yet reached a good solution for those companies to pay tax to the state. “Te Duong Dara continued to say that we still have problems with taxation laws and we have to guarantee that the new taxation laws will be right; otherwise, those foreign companies will withdraw their investments from Cambodia.”

Moneaksekar Khmer, Vol.15, #3630, 4.12.2008
Newspapers Appearing on the Newsstand:
Thursday, 4 December 2008

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