Cambodia Thai Trade up 60% since peace; Disputed oil & gas for next generation

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After Thailand former premier, Abhisit, took Thailand on a confrontational route with Cambodia, destroying just about all trade between the two countries, with last year election that saw Yingluck became Thailand’s premier, trade between Thailand and Cambodia shot up 60%, says the Thai embassy in Cambodia.

The Thai Embassy in Cambodia said in 2011, Thai Cambodia trade shot up 20% and so far this year, it is up 40%. The latest is a bus service between the two countries. In detail, Thai Cambodia trade amounted to about 3.08 billion U.S. dollars in 2011, says the Thai embassy in Phnom Penh.

Yet between Thailand and Cambodia, in the Gulf of Thailand, lie what World Bank says is potential oil and gas richness. That richness continues to be disputed between the two countries.

  • The Southeast Asian oil and gas community has been discussing about the overlapping claims dispute between Thailand and Cambodia. The overlapping claims area (OCA) extends more than 27,000 square kilometres in the Gulf of Thailand and originates from a dispute concerning the rightful border between the countries. The reason for the intense regional interest in the OCA is that many oil and gas experts believe the area within the OCA is the most attractive undeveloped oil and gas exploration area in all of Asia.

The latest on the disputed oil and gas richness, is Thailand’s Energy Minister, who told the local press, that the political situation in Thailand is not conducive for talks on the dispute oil and gas tracks. The Yingluck Energy Minister said, quote:

“The oil and gas dispute with Cambodia is for the next generation of Thais to discuss with Cambodia,” quoted Matichon of the Yingluck’s Energy Minister.

Indeed, the Yingluck Energy Minister is right, that Thailand is not ready to negotiate an oil and gas deal with Cambodia. In Thailand, the Thai establishment is highly “Nationalistic” and “Anti Thaksin.” And the establishment will often say that Thaksin have sold out Thailand’s national interest and have very often accuse Thaksin of self-interest.

This includes the disputed oil and gas track. For example, Abhisit and figures of the Thai Nationalist, often accuses Thaksin of conducting personal oil and gas business in Cambodia.

  • However the disputed OCA goes back beyond the Thaksin issue:

The dispute between Thailand and Cambodia over the OCA dates back to 1907 is based upon differing interpretations of a treaty and maritime law put forth by the two countries, however, a Memorandum of Understanding (MOU) setting forth an agreed mutual framework for a settlement of the dispute was signed by both sides in 2001, only to be later cancelled by Thailand in 2009 for political reasons.

In an effort to shore up their claims to the OCA both Thailand and Cambodia have already awarded their own individual conditional exploration and production licenses to various oil and gas companies to develop various areas within the OCA, however, these companies are all required to wait to commence exploration and production until after the dispute between the two countries has been resolved.

Thailand divides the OCA into blocks 5-14 and has awarded conditional licenses for these blocks to Chevron, British Gas, Mitsui, Idenistsu and PTTEP.

Cambodia divides the OCA into area 1-4 and has awarded conditional licenses for these areas to Idemitsu, Conco Phillips and Total.

For the last few years, there has been little or no progress with regard to finding a compromise to this dispute, but since the new government was installed in Thailand earlier this year, there seems to be a renewed political will to find a settlement on both the Thailand and Cambodian sides which has given rise to optimism.

  • For the past few years, the sour relations between Thailand and Cambodia can be traced to Cambodia’s exercising its sovereignty in appointing Thaksin as an economic adviser, a few years back, during the Abhisit governing of Thailand.

That Cambodia appointed Thaksin as an economic adviser and visits to Cambodia by Thaksin, angered the Thai establishment, as Cambodia interfering into the internal affairs of Thailand.

Abhisit off course, represents the Thai establishment that sees Thaksin as its arch enemy-and thus Abhisit took Thailand on a confrontational course with Cambodia. The result is that relations between Thailand and Cambodia exploded into open warfare-with several military clashes-hurting, apart from the Thai Cambodian relations, also damaged the reputation of ASEAN on the global stage.

Trade between the two countries came to a near stand still, despite Cambodia’s GDP growing about 7% and Thailand’s GDP at about 5%. Even tourism, dried up between the two countries, leaving mostly “Gambling Dens” as the only resemblance of normalcy between the two countries.

But Abhisit lost the Thai general election last year to Thaksin’s sister, Yingluck, and thus Yingluck, with the help of her brother, have been mending the Thai Cambodian relations.

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