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Petroleum Law a Step Closer

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Cambodia crude oil
Cambodia’s first oil exploration could begin in 2018 and a petroleum law needs to be in place by then. Reuters

The Ministry of Mines and Energy (MME) yesterday sent the newly-drafted petroleum law to civil society organizations and other partner institutions working in the extractive sector for consultations before submitting it to the Council of Ministers for approval by the end of this year.
 
Meng Saktheara, a secretary of state at the MME, said oil was a valuable national resource to be used to promote and develop socio-economic sectors and improve the living conditions of the people. He added that there should be a law and regulations put in place in the sector.  
 
“The key mission of the Ministry of Mines and Energy is to promote development and business with this resource to minimize the negative impacts on the environment and society as well as protect and increase the benefits for local communities to convert the investment in the field to maximize the highest economic and social outcome,” Mr. Saktheara said.
 
The draft petroleum law was drawn up in 2014 after the ministry of mines and energy was established. The draft of the law was made in reference to and based on the petroleum law drafted by the former Cambodian National Petroleum Authority (CNPA). There are various similar laws in Asean countries and in places like Norway and they have all involved consultations with other ministries, NGOs, the private sector, law firms and Khmer literature specialists.
 
The draft petroleum law is made up of nine chapters and 55 articles and the purpose of the law is to manage and promote the development and utilization of oil resources and petroleum products for the long-terms benefit of the people through increasing state revenues, contributing to the enhancement of people’s lives, creating jobs, environmental protection and promoting and developing the nation’s industrial and commercial sector.
 
Kim Natacha, executive director of Cambodians for Resource Revenue Transparency, told Khmer Times that civil society and NGOs found the draft law’s principles to be transparent, accountable and fair, but NGOs will observe the implementation of the law to ensure all principles are put into practice.
 
“Today’s meeting was a good step from the MME since the ministry had submitted the draft petroleum law to NGOs and civil society,” Ms. Natacha said. “Doing this is to provide more time for civil society to give recommendations, ideas and other details for input in the law and we think it is a good process and we are happy to work with the ministry to ensure that the practices adhere to good governance, participation, effectiveness and transparency,” Ms. Natacha said.
 
Secretary of State Mr. Saktheara said the draft petroleum law will be directly implemented to ensure transparency, fairness and responsibility when Cambodia extracts its first oil in either 2018 or 2019. He added that the MME is trying to complete the law before Cambodia starts extracting oil.
 
“The Kingdom’s first oil extraction would not happen until 2018 or it may be delayed another year if the global oil price is on the wane and the price is not stable. However, if the global oil price is increasing, we will push it as much as we can,” he said.
 
“On the top of this, we have to make sure that everything will be done well, such as an extractive master plan and on the technical side,” Mr. Saktheara added.
 
The ministry’s figures reveal that by the end of March this year, a total of 302,776 tons of petroleum was imported compared with 434,288 tons in the same period last year, resulting in a 30 percent fall in imports.
 
The figures for imports indicate Cambodia spent a total of $115 million in the first quarter, a fall of about 55 percent from the $258 million spent in the same period last year.
 
Cambodia imported 2.55 million tons of petroleum in 2015, a rise of 64 percent from 1.55 million tons the year before, according to data from the ministry of  commerce.
 
Cambodia spent $926 million on oil-based products last year, down 57 percent from the $1.46 billion in the year before, stated the ministry.

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