The government of Cambodia signed on Wednesday an agreement with Singapore-listed KrisEnergy Ltd to develop Cambodia's first oil field that is expected to produce the country's first-ever own oil within 24 months after the project launch.
KrisEnergy, which has been operator of Cambodia Block A in the Gulf of Thailand since 2014, plans to develop the Apsara area in the northeastern part of the concession.
As per terms of the agreements, KrisEnergy has 60 days to declare a final investment decision that would mark the formal launch of the Apsara development project expected to produce first oil in up to 24 months, the Singapore-based company said in its statement.
KrisEnergy holds a 95-percent participating interest in the block, and Cambodia's government owns the other 5 percent.
"Apsara marks only the first phase of the development of Cambodia Block A, there remains further potential in other geological trends within the contract area for future investigation," said Kelvin Tang, KrisEnergy's Chief Operating Officer and President of the Company's Cambodian activities.
The oil accumulations in the block are small and spread over a large area, which requires time and significant funds to be fully developed, therefore, the company has adopted a prudent phased approach to the development, KrisEnergy said, adding that because of these reasons, "there is some uncertainty regarding long-term production rates, reserves and commercial viability."
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At the signing ceremony, KrisEnergy's Tang said that the company was in search of partners to invest in the Cambodian project, while Cambodia's government will get some US$500 million in fees, taxes, and royalties over the project's lifespan.
According to Cambodian Finance Minister Aun Pornmoniroth, the area is estimated to yield more than 30 million barrels over 9 years. Pornmoniroth also vowed that he would not allow Cambodia to become an overly oil-reliant economy, and would invest the oil revenues into structural reforms to boost growth.
By Tsvetana Paraskova for Oilprice.com
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