Cambodia Official: Expect Chevron to Start Development of Block A Next Year

Published September 26, 2012

Dow Jones Newswires

The Cambodian government expects to be able to issue a license for offshore Block A to U.S. oil major Chevron Corp. (CVX) by the end of the year, the acting director-general of the Cambodian National Petroleum Authority said Wednesday.

Chevron discovered commercial oil resources off the coast of the Cambodia in 2010, but is still in talks with the Cambodian government about the terms for developing the block.

"Cambodia does not yet have all the relevant laws and regulations in place," Mr. Sok Khavan told Dow Jones Newswires in an interview. "We are very close to finalizing this discussion and hope to have an agreement by the end of the year, so that development can start [next year]."

Chevron, which has already drilled 18 wells at Block A, will develop the field under a production-sharing agreement.

The government will likely receive the majority of revenue from the project, depending on factors including the price of oil and production and development costs, Mr. Sok Khavan said.

"From our analysis, the government's share should not go much below 70% and will be close to 80% in case of high oil prices," he said.

The government is unlikely to conduct a big licensing round for oil and gas blocks, he said. "At the moment we are trying not to bite off more than we can chew," he said.

Write to Jacob Pedersen at jacob.pedersen@dowjones.com

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