Striking Oil Is No Antidote for What Ails Cambodia’s COVID-hit Economy | WHAT REALLY HAPPENED

Striking Oil Is No Antidote for What Ails Cambodia’s COVID-hit Economy

In the final days of 2020, Cambodia extracted its first crude oil from the Apsara field, 110 nautical miles off the coast of Preah Sihanouk province in the Gulf of Thailand. After years of delays, Prime Minister Hun Sen hailed the start of production as “a blessing for Cambodia,” making it the eighth oil producer in the 10-member Association of Southeast Asian Nations (ASEAN). Yet striking oil comes amid a COVID-induced recession, which saw Cambodia’s economy contract by 2% last year after decades of sustained growth.

Cambodia’s tourism sector and manufacturing exports have been hit hard, while its domestic economy suffered in 2020 under COVID-19 restrictions. Yet Cambodia, with just 479 confirmed cases in total, has fared better than most and its economy is predicted to grow by 4% this year. Oil revenue will contribute minimally, with production reaching 7,500 barrels per day in the first phase of the project. But with the potential for the oil and gas sector to expand, its future contribution will depend on good governance.

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