Oil and Gas Dynamics in the Gulf of Thailand

A recent report from the International Monetary Fund (I.M.F.) has stated that in a moderate scenario oil revenue income for Cambodia would start at US$174 million by 2011 and peak at $1.7 billion per year by 2021.

The I.M.F. predictions do not include the potentially larger basin that is currently in a disputed Overlapping Claims Area (O.C.A.) on the maritime border between Thailand and Cambodia. The Cambodian Ministry of National Defense has recently announced plans for a tripling in the size of the navy in order to provide security for the oil production facilities. According to Cambodian Minister of Defense Tea Banh, the recent expansion plans cite anti-terrorism and anti-piracy as the underlying justification for the expansion.


The implications for Cambodia are significant. The economic benefits of the resource revenue generated by the oil projects have the potential to make considerable improvements to Cambodian society. However, factors are already in place which suggest that the impact may not be positive. The income based on resource rents would in effect double the country’s G.D.P. in the initial stages of the project. If this massive input is managed poorly, it could lead to severe inflation and have a considerable impact on the garment sector that currently makes up 80 percent of Cambodia’s export economy.

PINR