Cambodia: My Views on Extractive Industries(Oil Gas and Mining) in Cambodia

Source: Open Development Cambodia
Source: Open Development Cambodia

Extractive industry is emerging in Cambodian, yet it is at the exploration phase. Even it was claimed the prospect of its existence, Cambodia has not yet developed any single oil and gas field. The Royal Government of Cambodia has announced the expectation of first oil drop may occur in 2016.

The revenue from oil and gas has not been generated; however, it was predicted by various institutions. For instance, International Monastery Fund (IMF) stated in its report that revenue from oil and gas in Cambodian could reach to USD 1.7 billion by the year of 2021 while UNDP report suggested that oil and gas industries respectively generated between 100 USD billion and 50 USD billion Cambodia (Economic Research Institute, June 2008).

The oil and gas field in Cambodian were divided into 25 blocks- 19 on-shore and 6-offshore. There is a huge potential area in the Overlapping Claiming Area. All offshore blocks and 3 onshore blocks were grant to 13 foreign companies to explore. Block A which was granted exploration license to Chevron in 2002 is the most advance block in term of development.

The present of abundant of resource has been mixed of blessing of cursing. The revenue generated from oil and gas industries involves into two aspects – 1). Transparency and accountability in the revenue management from the extractive industry, 2). The economic spending.

The governance of extractive industry is a matter of the early stage of exploration where the government has put the oil and gas field into auction, contract, and saving-spending model.

While Cambodia is at the stage of exploration, demanding of good governance is a must. The Royal Government of Cambodia established a regulatory structure Cambodian National Petroleum Authority (CNPA) which is recently under the control of recently split Ministry of Mine and Energy. CNPA is designed as an authority of all petroleum operation.

However, Cambodia does not have pertinent Extractive Industry law to put in place yet. We have only the 1991 Petroleum Regulations which was amended in 1998-1999. This law absolutely needs to be updated.

The overall transparency of the sector is not high since the contract revenue sharing agreement, signature bonuses and detail of collection are not publicly disclosed.

According to The 2013 Resource Governance Index, Cambodia got only 29 score out of 100 which is the highest score. The score composite of four elements –Institutional and Legal Setting, Reporting Practices, Safeguards and Quality Controls and Enabling Environment. Based on this finding, Cambodia has to try harder to reach a better level of resource governance index.

In addition to the concerns mentioned above, there are few NGOs working in the EI sector focusing on revenue transparency, environmental impact and education, despite of fact that the EI sector generated potential revenue to country’s economic.

The limitation of CSOs in the consultation and participation in process of draft Environmental Impact Assessment Law (EIA Law) and draft petroleum law and absent of Access to Information law has laid many challenges for CSOs to request to disclosure of information on legal ground, result in a government not obliged to be held accountable by its citizens. This year the government has opened floor the Ministry of Information to work on Access to Information Law.(To be updated)

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