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November 10, 2007

Malaysia bidding for oil and gas in Cambodia

Malaysia is among dozens of countries vying for a share of oil and gas reserves in Cambodia.  The Indo-Chinese nation is expected to begin oil production in 2011,  with an initial estimate of 700 million barrels in Block A. Deputy Prime Minister Sok An said other bidders include China, France, Indonesia, Japan, Singapore and South Korea.

They have shown interest to drill oil and gas at Block A located 200km southwest of Sihanoukville, encompassing 6,278 sq km in total size area. Currently, the US' Chevron is assessing the amount of commercial reserves, while there are also 27 more potential wells, he said. Chevron discovered oil in 2005 off the Cambodian coast, southwest of Sihanoukville.

"We can only start production in the next decade as the processes from exploration to production take time. "We need more studies to determine how to come out with the best formula between the companies and the government," he told the Cambodia Investment, Trade and Infrastructure conference here Thursday. Sok An also said there are several other potential areas, including an area of 27,000 sq km in the Gulf of Thailand, where Cambodia was involved in an overlapping claim with Thailand, as well as in Ton Sap Lake.

He said Cambodia is likely to opt for a 50-50 sharing agreement with Thailand to resolve the overlapping claim. According to energy industry officials, the Cambodian Government is highly expected to back Chinese and American companies to undertake oil and gas productions, than regional players like Petronas and Thailand's PTT. Petronas is currently operating two petrol stations in Cambodia. Sok An said Cambodia was excited over the oil discovery as the country was now a net importer and was feeling the pinch of the high oil price, which was close to US$100 per barrel, with retail price above US$1 a litre here.

Besides oil and gas, Cambodia is also rich in minerals, among them are bauxite, gemstones, coal, gold and limestone. Among companies engaged in the mining sector are world-class players like BHP Billiton and Oxiana.

Courtesy BERNAMA

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