Published: Sept. 27, 2012
PHNOM PENH, Cambodia, (UPI) -- Cambodia aims to begin its first offshore oil production next year, a government official said.
"We would like to proceed quickly, on a fast-track basis," Sok
Khavan, acting director general of the Cambodian National Petroleum
Authority, was quoted as saying Wednesday at the Oil and Gas Investor
Summit in Singapore by Platts news service.
Khavan was referring to oil exploration in Block A off the coast of
Cambodia in the Gulf of Thailand, operated by Chevron Corp. with
partners Mitsui, KrisEnergy and GS Caltex.
The development, covering 1.2 million acres, consists of a wellhead
platform and a floating storage and offloading vessel, says a Chevron
fact sheet.
So far Chevron has drilled 15 wells, says CNPA.
"This is the first development for Cambodia and the fact that we are
new in this means we need to finalize (the contract) and make sure that
our legal regime addresses all the issues," Khavan said. "We are now
putting the final pieces in place and the discussion with Chevron and
their partners are proceeding very well."
Chevron says it expects government approval and a final investment decision on the field by the end of this year.
"We continue to work with the government of Cambodia to obtain
project approvals to achieve a final investment decision at the earliest
possible date," a Chevron spokesman told The Wall Street Journal.
Khavan said it was difficult to estimate the potential production of
Block A, because it is a new development and Chevron needs to pool
several pocket discoveries together.
Under a production-sharing agreement, the Cambodian government will
likely receive most of the revenue for the project, Khavan said, but
percentages would vary depending on factors such as the price of oil and
production and development costs.
"From our analysis, the government's share should not go much below
70 percent and will be close to 80 percent in case of high oil prices,"
he was quoted as saying by the Journal.
Separately, Cambodia and Thailand have yet to settle a maritime
territorial dispute regarding 10,000 square miles that holds potential
reserves of 12 trillion-14 trillion cubic feet of natural gas and an
unspecified amount of oil, Khavan said.
"Only recently, the two governments have been optimistic that the
issue can be resolved," Khavan said. "But the big issue is how revenues
should be split."
Khavan said the country's gross domestic product, which stood at
about $13 billion in 2011, is expected to increase five-fold by 2030.
That growth has translated into an increase in oil demand of about 10
percent annually.
Cambodia relies on Singapore, Thailand and Vietnam for its oil imports.
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