29-December-1998 Win-win Policy Brings about Peace, National Unity, Unification of Land and Water, and Now the First Drop of Oil in Cambodia [Unofficial Translation]

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CNV:

Venerable Buddhist Monks,
Samdech, Excellencies, Lok Chumteavs, Members of the Senate, National Assembly and the Royal Government,
Dear Senior Citizens, Grandpas and Grandmas, Compatriots!

On behalf of the Royal Government of the Kingdom of Cambodia, I have a great pleasure to inform all our compatriots about the start of Cambodia’s first oil production in Block A in the gulf of Cambodia, which we have been waiting for a long time. Thanks to the efforts of the Royal Government and the active participation of Kris Energy, the operator of this project, we have so far achieved successful completion of the construction, installation of the necessary equipment and facilities for the infrastructure to proceed with production of our oil resources.

Cambodia’s first drop of oil will start coming from the first well – A-0ID of the Platform A in the gulf of Cambodia on December 29, 2020, coincidentally on the same day as the 22nd anniversary marking the end of the war and bringing about national unity, unification of land wand water, through win-win policy (December 29, 1998 – December 29, 2020). December 29, 1998 gives us all the capabilities we needed to have the first drop of oil in Cambodia today, on December 29, 2020.

I would take this opportunity to remind our compatriots that the first oil agreement was signed in 2002 with the Chevron Oversea Petroleum (Cambodia) Ltd., which included LG Caltex Oil Corporation, MOECO Cambodia Co Ltd., and Kris Energy. The consortium is led by US’s Chevron. In 2010, Chevron announced the discovery of Cambodia’s first commercial oil field and drafted development and business plan for the Royal Government to review and finalize. According to the plan, the first oil production was scheduled to start in December 2012. However, examining the distribution of economic benefits and legal consistency relating to the development and business plan proposed by Chevron at the time required the two sides to renegotiate some of the terms of the agreement. Seeking for a consistency with the provisions of Cambodian law and better equity in the distribution of economic benefits from this business plan, the implementation of the oil production plan in December 2012 could not proceed.

Negotiations for the oil agreement intensified between the two parties (the government and the company) on legal, technical and economic aspects. During this period of intense negotiations, Chevron Oversea Petroleum (Cambodia) Ltd., LG Caltex Oil Corporation and MOECO Cambodia Co Ltd requested to pull out one after another in 2014 and 2016. Negotiations dragged on for a while from 2010 until August 23, 2017, when a new agreement and a new development plan and business plan concluded, paving the way for the construction and development of an oil well platform.

Major and essential oil production infrastructure built, installed and completed in Block A for the production process includes:

  • Oil well platform made in the island of Batang, Indonesian, began construction in December 2019 and completed in August 2020. The platform arrived in Block A and completely assembled on September 7, 2020.
  • The oil production vessel was assembled, repaired and equipped on September 2020 in Singapore, and arrived in Block A on October 18, 2020. Oil tanker is prepared and ready in Block A on November 9, 2020.

The construction of the first well completed on December 23, 2020 and the first production will start on December 29, 2020. In addition, two other wells have already been drilled and reached the oil reservoir.

The start of this oil production is a blessing for Cambodia. This is an important first step for Cambodia to build national capacity as well as the oil, gas and energy industries foundation in Cambodia. Key benefits include:

National revenue, the economic benefits derived from the creation of industrial diversification in the oil sector and national capacity building in this sector. The discovery and the production of oil and gas resources in Cambodia under the leadership of the Royal Government is a blessing for the people and the nation, not a curse, as some unscrupulous people claimed.

Covid-19 bothered us but could not destroy our efforts to produce the oil. New Year 2021 is coming, although we are not as happy as in previous New Year celebrations because of Covid-19, we have received an enormous gift for our nation, the first oil produced in our land. New year, new achievements for the Cambodian economy from the beginning of 2021 onwards.

I would like to take this opportunity to express my deepest and most sincere gratitude to all our compatriots who have actively participated in and supported the Royal Government’s process of economic and social development all these times. I would like to offer blessing for all, Samdech Preah Sangharajas, Buddhist monks, Samdech, Excellencies, Lok Chumteavs, senior citizens, grandpas and grandmas, and wish brothers and sisters, nieces and nephews all the bests of the four Buddha’s blessings – longevity, beauty, happiness and strength./.