Thursday, 31 March 2011

Future experts in the kingdom’s extractive industry

Development of the Kingdom’s extractive industry is only beginning. But, experts agree that there is great potential in the mining of oil and rare minerals in Cambodia. Vorn Makara and Tet Chan look into the efforts being made to prepare Cambodia’s university students to be leaders in the industry when it takes off.

via CAAI

Wednesday, 30 March 2011 15:00Vorn Makara and Tet Chan

Extractive industries” is a term many young people are not aware of, but they are familiar with the words “oil and gas,” and chances are those words bring money to mind.

The main duty of students is studying. However as citizens, the have to participate in the government’s activities and the nation’s development. The extractive industry, or EI, is something new for Cambodia, but people, especially young ones, do not seem to be paying any attention to the subject or care how the government will use the revenue from EI transparently.

Sounsau Sathya, senior assistant at the Extractive Industries Climate Change Program at Youth Resource Development Program (YRDP), said “youths’ knowledge regarding extractive industries is still limited because they have no chance to get EI information, which is not readily available yet”.

Studying Economics and Rural Development at the Royal University of Agriculture, Seurm Heurng said he knows a little information about extractive industries. “I am not so interested in this sector because I think that the benefits are for high ranking people.”

EI is new for Cambodia and encompasses all companies engaged in activities related to the exploration and production of non-renewable natural resources such as oil, gas and minerals.

Joining a workshop on EI information at YRDP, Try Ngoun Eng, a junior student at Panassastra University, said he gained a lot of information and knowledge about EI.

“Before I had not known about the Extractive Industries Transparency Initiative, but now I can get more knowledge and experience,” he said, adding that he always raises topics related to EI to do presentations for his academic courses in order to tell other young people about the impacts and benefits of the EI sector.

Oil-rich countries like Azerbaijan and East Timor can control the EI revenue effectively to develop their countries because they have used EI revenue transparently and accountably. It is written in the Cambodians for Resource Revenue Transparency newsletter that if Cambodia’s government can do so, Cambodians will see positive changes, including economic growth, political stability, a substantial rise in private investment and increases in public spending that improve health care, education and infrastructure, all of which will alleviate poverty.

Sek Pisey, a senior student majoring in geography at the Royal University of Phnom Penh, said it is good to pump out the oil or gas, but he is worried about spending of that revenue.

“I am afraid that that revenue will be used improperly, which cannot benefit people,” he said.

Sounsau Sathya also expressed his concerns. “If we cannot control EI revenue thoroughly, we will lose revenue from EI resources and the next generation cannot take advantage of that.”

Oil-rich resource countries like Azerbaijan and East Timor have become members of the Extractive Industries Transparency Initiative, meaning that they have to reveal all the information related to the EI sector in their countries to their people, and they also creates a fund to save EI revenue for their country’s future. Cambodia has not had this kind of transparency yet, but recently the Ministry of Economy and Finance has put information on its website about state financial operations.

Mam Sambath, executive director of the NGO Cambodians for Resource Revenue Transparency, said the government is willing to control EI revenue.

“The government showed some part of mining revenue through the Ministry of Finance website, but it is not detailed,” he said.

Cambodia has divided up 26 onshore and offshore petroleum blocks in order to allow private energy companies to access the Kingdom’s oil and gas reserves. According to a document from the National Petroleum Authority, there are more than 20 companies authorised to explore for oil and gas, and in a report from the Ministry of Industry, Mineral and Energy, some 60 firms have the licenses to extract minerals.

After searching and studying about oil deposits for many years, the Chevron company will be the first to drill for oil in Cambodia at its first project known as Block A in December 2012.

According to Mam Sambath, the Cambodian government has now drafted a law to deal with the EI sector and the government will allow civic participation in sharing their opinions over EI.

“We expect that they [the government] will take the revenue from oil and gas resources to develop prioritised sectors,” said Sounsau Sathya.

He added that EI is very important for all young Cambodians to know about because youth is an impetus for changing society towards development, so they can join hands with the government to use and observe that revenue transparently.

Prospects in the Thai gulf

CHEVRON will likely be the first company to tap Cambodia’s oil resources, as it recently extblished a permnant office in Cambodia and, in a press conference earlier this year, reiterated its commitment to begin production by the end of 2010. The American company owns a 30-percent stake and is the operator of 485,000 hectare offshore oil Block A, located in the Thai gulf, shown here.

. ChevronTexaco (CVX) will start looking for oil in Cambodian waters by drilling five exploration wells about 140 kilometers off the port city of Sihanoukville. A preliminary estimate of the volume of crude oil was 400 million barrels.

Sok An – who is also Chairman of the Cambodian National Petroleum Authority – said the office would increase cooperation between Chevron and the CNPA, partially by offering increased training opportunities for Cambodians, said Ek Tha.

“It is very good timing. And you know very well that we need skilled people to work on Chevron’s offshore project,” Ek Tha quoted the Deputy Prime Minister as saying at a March 23 meeting.

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