A draft of the long-anticipated petroleum law is 80 per cent complete, according to a Ministry of Mines and Energy official, and will put in place price mechanisms to ensure globally representative and competitive fuel costs.

“We want to make sure the draft law is in compliance with ministry’s policy and consistency with other natural resources laws and regulations and international best practices as well as to attract investment in this new industry,” said Keo Tourt, director of administration at the Mines and Energy Ministry’s General Department of General Affairs.

Tourt said the legislation will be in the form of a sub-decree and is being worked on in collaboration with experts and consultants on the management of oil and gas pricing.

“It is a well-known fact that oil and gas resources are both a gift and a curse. It is how we manage it that makes it a gift or a curse for the people and its economy,” he added.

Tourt said that while the law would look at pricing, it will also ensure petroleum and other relevant products would have to meet certain quality standards, as determined by the ministry in charge.

Bin Many Mialia, marketing division manager at PTT (Cambodia) said that while he hasn’t seen a copy of the draft law yet, he was unsure what kind of price mechanism would be applicable in Cambodia’s case.

However, he said: “It could be workable if the government has its own state enterprise to lead the oil market in Cambodia.”

While the law would look at local pricing as well as offshore and onshore exploration, Mialia said it should also consider midstream and downstream processes as well.

He added that there was a lot of oil smuggling across the country and border areas, which result in huge losses to state revenues.

“To eliminate oil smuggling can start any time, it is duty of the government to do so,” he added.

KrisEnergy, which holds a 55 per cent interest in Cambodia’s Block A, said in a filing last month that it is close to reaching a deal with the government to extract oil from the block.