Construction of Cambodia’s first oil refinery put on hold again
Construction of Cambodia’s first oil refinery oil plant has once again been put on hold, this time because of finance issues.
The project, which sits on a site spanning the borders of Kampot and Preah Sihanouk province, is a joint venture between local investment firm, Cambodia Petrochemical Co (CPC) and China’s CNPC’s Northeast Refining and Chemical Engineering Co Ltd.
Director-General of Petroleum at the Ministry of Mines and Energy (MME) Cheap Sour said this week that the responsible companies are now seeking new partners to cooperate on the project.
“The principals in the joint venture have financial problems and [they] are seeking other potential partners. As of today, they have not [provided the ministry with] any updates,” said Cheap.
The project first broke ground in May 2017, with an investment level of $620 million set for the completion of the first phase. The initial completion date for that first phase was slated for early 2019.
Weather and facility upgrade issues caused the original completion date to be re-evaluated. That target is now set for 2022.
Industry expert Tommy Christensen, CEO of Go4 Bunker (Cambodia), noted: “Cambodia as a country is in need of “value-added” investments to process the available agricultural and energy resources. These investments are critical to create jobs and drive productivity improvements to make Cambodia competitive in the international marketplace. The development of a refinery and moving it into production is a major task. The key to success with this project is to bring in a strong strategic partner. You would need [a] World Bank, International Finance Corporation (IFC) or Asian Development Bank (ADB) on board as well, both for financing, equity and development money.”
[The government] inviting experts as advisers for optimal decision-making and setting the criteria for investors, designers and contractors [is also part of the success formula needed]. Working together will enable an ability to leverage each other’s assets, connections, creativity and expertise to achieve mutually beneficial outcomes that satisfy individual partner’s development objectives as well as [the overall] business objectives, Christensen added.
Cheap Sour said: “The refinery is private sector driven. However, if partners with previous experience in a project of this kind [such as the ADB or IFC were interested], it would be good to enter into discussions with them. In terms of inviting outside experts and advisers, we have been searching for upstream and downstream advisers and any assistance that they could contribute.”