SIHANOUKVILLE, CAMBODIA – In the coming weeks, US oil giant Chevron will ferry oil and gas equipment hundreds of miles offshore in the Gulf of Thailand, and use them to reconfirm what many already believe to be true: Cambodia is sitting on a billion-dollar gold mine. Black gold to be exact.The amount of oil Cambodia will produce in the coming years is likely to have a negligible impact on world markets. But for this impoverished country of 13 million, still recovering from the brutality of the Khmer Rouge and Vietnamese occupation, it could be nothing short of transformative. "If managed well, this could be a huge opportunity for Cambodia," says Tim Conway, a poverty reduction specialist for the World Bank.
| If managed well ... |
But the government, diplomats, and the myriad aid organizations operating here have been less sanguine. Earlier this month, officials in this southern port town announced plans to construct a massive new port facility to service oil operators offshore, in anticipation of a full-scale oil boom.
Oil companies from China, Vietnam, South Korea, and Japan are all vying for offshore contracts. The UN Development Program (UNDP) identified oil as the best hope for the country's future, and released estimates widely cited in the development community. In Chevron's "Block A" alone, the first of six demarcated offshore zones, the government share of oil and gas revenues are expected to top between $700 million to $1 billion a year.
By some estimates - according to the UNDP - it's not unreasonable to believe that in the coming years, revenue from gas and oil deposits will more than double Cambodia's GDP, which now stands at about $5 billion (much of that is from foreign aid). And that's not even counting the disputed zones between Thailand and Cambodia, which could be the richest of all.
Many diplomats and NGOs in Phnom Penh worry that the oil and natural gas - which could start flowing as soon as 2009 - could reverse more than a decade of poverty alleviation and transform Cambodia into a full-scale kleptocracy. Nigeria is the textbook case of what could go wrong, according to the UNDP.
| Nigeria is exhibit A, allright. Much more hand-wringing at the link. |