When Cambodia’s Oil Begins to Flow: the Politics of Becoming a Petro-State

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Memo #29

Andrew Cock

Within two or three years Cambodia will likely export petroleum resources from offshore fields containing up to two billion barrels of oil and significant quantities of natural gas. This long anticipated event has stimulated discussion as to whether petroleum extraction will benefit the country. Concerned about the implications of oil for the evolution of the Cambodian polity, aid donors and NGOs have encouraged the ruling elite to learn from the mistakes of other resource-rich developing states afflicted by the so-called “resource curse”.

The widespread use of the resource curse notion by these groups mean that an analytical device used in scholarly studies has become part of Cambodian politics. Aid donors, civil society groups, and the ruling elite have deployed the resource curse warnings in different ways.

Aid donors and civil society groups use the notion to highlight the need for greater transparency concerning government contracts with oil companies and the financial flows associated with exploration and exploitation activities. They view transparency as a crucial foundation for heightened accountability. The Cambodian elite use the term to reassure their international and domestic audiences that they understand the problems that other resource rich states have faced and that they are able to handle the problems. The elite also highlight the need for external actors to pressure oil companies to negotiate fairer terms. But despite these multifarious uses, neither the Cambodian government nor international oil companies are particularly keen to disclose the terms of oil exploration and exploitation.

With Cambodia, Angola, and Chad in mind, Chevron shareholders including Oxfam America put forward a resolution that Chevron will disclose payments to foreign governments. Concerned over the intensifying competition it faces in bringing new fields into production, Chevron’s Board warned that “unilateral disclosure” would place the company at a competitive disadvantage. At the 2010 Annual Meeting, some 92.9 per cent of the stock voted against the proposal. This ringing endorsement for the status quo suggests that the structure of the international oil market will work to limit the traction of recent US and international initiatives related to extractive industries.

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