Hun Sen declares oil extraction a ‘failure’ for Cambodia

Premier Hun Sen declared Cambodia’s attempt at oil extraction a “failure” on Sunday, just eight months after the kingdom achieved its long-awaited milestone of producing its first drop of crude.

In late December the nation announced it had extracted oil from its waters in the Gulf of Thailand which experts believe boasts significant deposits.

But the operation, led by Singapore’s KrisEnergy, was endangered after the company was unable to pay its debts and filed for liquidation in June.

“On December 29, we announced the first drop of oil — perhaps now it is a failure,” Hun Sen said Sunday.

KrisEnergy had forecast a peak production rate of 7,500 daily barrels — a modest amount compared with Cambodia’s oil-producing neighbours Vietnam and Thailand.

“In the end, there were 1,000 barrels pumped out a day,” Hun Sen said. “And now the company is bankrupt.”

He also claimed that KrisEnergy “fled with the tanker”.

“We couldn’t prevent it on time… they ran away with the oil,” the premier alleged, without giving any further details.

AFP has contacted KrisEnergy for comment.

Before it filed for liquidation, KrisEnergy held a 95 percent stake in the operation, while the government holds the rest.

The promised revenues could have been significant for the impoverished country, which estimated in 2017 that it would make at least $500 million in royalties and taxes from the project’s first phase.

But the discovery also raised concerns about how Cambodia, a nation long ranked poorly in terms of transparency, would account for its newfound wealth.