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Cambodia in new push on Thai gulf oil row

PHNOM PENH: Cambodia has drawn up a new proposal for the joint development with Thailand of a disputed 25,000 sq km area in the Gulf of Thailand believed rich in natural gas, a Cambodian energy official said on Monday.

Foreign oil firms awarded conditional concessions by Cambodia in the overlapping claim area (OCA) are keen to help Cambodia and Thailand resolve their decades-long wrangle and get on with exploitation, the official said.

"Because this is of mutual interest between Cambodia and Thailand I'm still very optimistic (that an agreement can be reached)," the director general of the Cambodian National Petroleum Authority, Te Duong Tara, told Reuters in an interview.

"We're trying to convince Thailand that this is the cheapest energy that we share. If Thailand prefers to get its energy from Myanmar or other parts of the world they can do that but the cost is high compared to this because Thailand already has a pipeline (near the zone)."

Cambodia originally proposed that a joint development agreement between Thailand and Malaysia for an area in the southern gulf be adopted as the model for the development of the OCA.

But both Cambodia and Thailand now agreed there were problems with the Thai-Malaysian model and Cambodia had drawn up a better proposal, Te Duong Tara said.

"Thailand commented that the Malaysian model is not so good because it's very simple at the beginning but when it comes to the implementation, it's very difficult," he said.

The new proposal includes a treaty setting out plans for the 50-50 development of the area as well as a petroleum mining code, a production sharing model and a taxation code, he said.

"We studied all kinds of models and then produced this special one, we've made it very detailed," he said. "We're going to submit it very soon to the cabinet and then also to the National Assembly."

AREA COULD HAVE 11 TRILLION CUBIC FEET OF GAS

The overlapping claim area could contain as much as 11 trillion cubic feet of gas as well as millions of barrels of oil and condensate.

Thailand awarded concessions in the area in the 1970s while in 1997 Cambodia struck conditional agreements on the disputed blocks with foreign oil companies including BHP Petroleum, Conoco, Enterprise Oil, Idemitsu.

With higher energy prices those firms were now keen to begin exploitation and were trying to facilitate a resolution of the dispute.

The president of Conoco Inc, Archie Dunham, visited Cambodia earlier this month and met Prime Minister Hun Sen and other officials for talks on how the dispute could be solved.

"When the oil price increases companies spend more on exploration," Te Duong Tara said. "Now the most important thing (for the foreign oil companies) is to assist Cambodia to resolve the problem with Thailand."

"If Thailand can agree to this, for a period of 10 to 20 years they're guaranteed a source of energy for their growth." -Reuters