Cambodia to extract and export its own crude oil

Cambodia To Extract And Export Its Own Crude Oil

After nearly two decades of discussions and proposals, Cambodia has announced it will begin to extract oil for the first time later this year, exploiting a potential rich new source of energy for state revenue.

Singapore-based KrisEnergy has been commissioned to launch the extraction of crude oil in Cambodia in late 2019 or early 2020 from the Apsara oilfield, located in Block A of the Khmer Basin in the Gulf of Thailand.

Lacking the infrastructure needed to process the commodity, the oil will not be refined in the country but Cambodia will have to export it.

Cambodia’s extraction plans have been hobbled for years due to a maritime territorial dispute with neighbouring Thailand but Block A is safely within Cambodia’s solely claimed area. It contains an estimated 30 million barrels of oil, according to Cambodia’s ministry of economy and finance.

US energy giant Chevron, which took a controlling stake in Block A in 2012, had earlier estimated it held 700 million barrels of oil but that figure has since been revised down substantially. In 2014, Chevron backed out and sold its stake to Singapore’s KrisEnergy for $65 million, roughly a third of what the US company had spent on exploration in the area over the years.

Cambodia To Extract And Export Its Own Crude Oil

In 2017, KrisEnergy signed an agreement with the Cambodian government over the oil field’s ownership. The Singaporean firm now holds a 95-per cent stake in the contract area while the government maintains a five-per cent share. However, the revenue-sharing arrangement with KrisEnergy was not immediately clear – people with knowledge of the matter said that the government was requesting as much as 70 to 80 per cent during negotiations but KrisEnergy was not happy with that.

KrisEnergy predicts the oil field will produce somewhere near 8,000 barrels per day of crude, with the first oil expected to be produced in October this year and transported by barge.

According to industry analysts, estimates are that the first six-year phase could earn the government between $90 million and $120 million at oil prices of $70 to $90 per barrel. If the government’s estimate of roughly 30 million barrels of oil holds, and if the fuel is also sold at today’s prices of around $65 per barrel, then the extraction could be worth as much as $1.9 billion.

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After nearly two decades of discussions and proposals, Cambodia has announced it will begin to extract oil for the first time later this year, exploiting a potential rich new source of energy for state revenue. Singapore-based KrisEnergy has been commissioned to launch the extraction of crude oil in Cambodia in late 2019 or early 2020 from the Apsara oilfield, located in Block A of the Khmer Basin in the Gulf of Thailand. Lacking the infrastructure needed to process the commodity, the oil will not be refined in the country but Cambodia will have to export it. Cambodia’s extraction plans have...

Cambodia To Extract And Export Its Own Crude Oil

After nearly two decades of discussions and proposals, Cambodia has announced it will begin to extract oil for the first time later this year, exploiting a potential rich new source of energy for state revenue.

Singapore-based KrisEnergy has been commissioned to launch the extraction of crude oil in Cambodia in late 2019 or early 2020 from the Apsara oilfield, located in Block A of the Khmer Basin in the Gulf of Thailand.

Lacking the infrastructure needed to process the commodity, the oil will not be refined in the country but Cambodia will have to export it.

Cambodia’s extraction plans have been hobbled for years due to a maritime territorial dispute with neighbouring Thailand but Block A is safely within Cambodia’s solely claimed area. It contains an estimated 30 million barrels of oil, according to Cambodia’s ministry of economy and finance.

US energy giant Chevron, which took a controlling stake in Block A in 2012, had earlier estimated it held 700 million barrels of oil but that figure has since been revised down substantially. In 2014, Chevron backed out and sold its stake to Singapore’s KrisEnergy for $65 million, roughly a third of what the US company had spent on exploration in the area over the years.

Cambodia To Extract And Export Its Own Crude Oil

In 2017, KrisEnergy signed an agreement with the Cambodian government over the oil field’s ownership. The Singaporean firm now holds a 95-per cent stake in the contract area while the government maintains a five-per cent share. However, the revenue-sharing arrangement with KrisEnergy was not immediately clear – people with knowledge of the matter said that the government was requesting as much as 70 to 80 per cent during negotiations but KrisEnergy was not happy with that.

KrisEnergy predicts the oil field will produce somewhere near 8,000 barrels per day of crude, with the first oil expected to be produced in October this year and transported by barge.

According to industry analysts, estimates are that the first six-year phase could earn the government between $90 million and $120 million at oil prices of $70 to $90 per barrel. If the government’s estimate of roughly 30 million barrels of oil holds, and if the fuel is also sold at today’s prices of around $65 per barrel, then the extraction could be worth as much as $1.9 billion.

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