Cambodia officially ends its short-lived oil production venture

Cambodia on August 1 officially ended its short-lived foray into the oil production business after the exploration firm it commissioned declared bankruptcy in June.

Prime Minister Hun Sen said that the country’s first-ever oil extraction had come to a full stop.

KrisEnergy started pumping crude oil from one of Cambodia’s offshore oilfields, Block A in Apsara field in the Khmer Basin in the Gulf of Thailand, in late 2020, which was the first-ever crude oil production in the Southeast Asian nation. However, the firm went into liquidation in June after production at the oil field failed to meet expectations, leaving it unable to repay its debts.

“On December 29, we announced the first drop of oil – it’s now perhaps a failure,” Hun Sen said in a public speech in Phnom Penh.

Miscalculation of potential production quantities

KrisEnergy, which held a 95 per cent stake in the block, while the Cambodian government owned the remaining five per cent, had expected a peak production of 7,500 barrels a day, or 2.73 million barrels per annum. However, at the end, oil production was only 1,000 barrels a day.

“Now, the company goes bankrupt and a tanker that carried the extracted oil had run away because we had not prevented it on time. It entered the Thai territory,” Hun Sen complained.

The future of Cambodia’s oil industry is unclear.

Total reserves in the Block A concession, initially estimated at 400 million to 500 million barrels, were once seen potentially generating billions of dollars in revenue. But reassessments over the years have seen their value downgraded significantly, due to low recoverability and the high cost of extraction.

Short time window to produce oil amid a global energy shift

Analysts say that Cambodia still holds potential to become an oil producer, but will need to attract new explorers and investment at a time when international oil companies are streamlining portfolios and reallocating capital to renewables and other low-carbon opportunities.

That said, the country might have just a short time window to tap its oil reserves as oil production is clearly going out of fashion globally as the world is embarking on a transition to renewable energies.



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Cambodia on August 1 officially ended its short-lived foray into the oil production business after the exploration firm it commissioned declared bankruptcy in June. Prime Minister Hun Sen said that the country’s first-ever oil extraction had come to a full stop. KrisEnergy started pumping crude oil from one of Cambodia's offshore oilfields, Block A in Apsara field in the Khmer Basin in the Gulf of Thailand, in late 2020, which was the first-ever crude oil production in the Southeast Asian nation. However, the firm went into liquidation in June after production at the oil field failed to meet expectations, leaving...

Cambodia on August 1 officially ended its short-lived foray into the oil production business after the exploration firm it commissioned declared bankruptcy in June.

Prime Minister Hun Sen said that the country’s first-ever oil extraction had come to a full stop.

KrisEnergy started pumping crude oil from one of Cambodia’s offshore oilfields, Block A in Apsara field in the Khmer Basin in the Gulf of Thailand, in late 2020, which was the first-ever crude oil production in the Southeast Asian nation. However, the firm went into liquidation in June after production at the oil field failed to meet expectations, leaving it unable to repay its debts.

“On December 29, we announced the first drop of oil – it’s now perhaps a failure,” Hun Sen said in a public speech in Phnom Penh.

Miscalculation of potential production quantities

KrisEnergy, which held a 95 per cent stake in the block, while the Cambodian government owned the remaining five per cent, had expected a peak production of 7,500 barrels a day, or 2.73 million barrels per annum. However, at the end, oil production was only 1,000 barrels a day.

“Now, the company goes bankrupt and a tanker that carried the extracted oil had run away because we had not prevented it on time. It entered the Thai territory,” Hun Sen complained.

The future of Cambodia’s oil industry is unclear.

Total reserves in the Block A concession, initially estimated at 400 million to 500 million barrels, were once seen potentially generating billions of dollars in revenue. But reassessments over the years have seen their value downgraded significantly, due to low recoverability and the high cost of extraction.

Short time window to produce oil amid a global energy shift

Analysts say that Cambodia still holds potential to become an oil producer, but will need to attract new explorers and investment at a time when international oil companies are streamlining portfolios and reallocating capital to renewables and other low-carbon opportunities.

That said, the country might have just a short time window to tap its oil reserves as oil production is clearly going out of fashion globally as the world is embarking on a transition to renewable energies.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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