The Cambodian government and KrisEnergy, a Singapore-listed oil and gas firm, are set to sign a petroleum agreement this month to pave the way for the company to start the groundwork for the extraction of oil from Block A offshore oil field in the Gulf of Thailand, which is expected to start in 2019, according to a senior official.
Ministry of Mines and Energy secretary of state Meng Saktheara told the Khmer Times yesterday that both sides had spent a long time making their revisions before the agreement. “We plan to sign the petroleum agreement with them very soon within this month because we already compromised on all terms and changes stipulated in the revised agreement,” he said.
Saktheara explained that the reason the revisions were time consuming was because there were a lot of issues in the new document. He said the issues included technical issues on exploration and production, concessional agreements, benefit-sharing, as well as addressing questions on the role of the government as the regulator and also a beneficiary in the exploration.
“Now that we agreed on how to overcome all the changes, we have to spend some time working together,” noted Saktheara. “This will pave a new way for our oil extraction from Block A which has been delayed since 2012 because we were not ready. So once the agreement is done, it is expected to take about 25 months for the company to start its construction work. We do expect to extract the oil in 2019 or early 2020.”
Tanya Pang, vice-president of investor relations and corporate communications at KrisEnergy, also confirmed the compromise and revisions to the agreement. “The documentation is ready to sign and we are awaiting confirmation from the various government departments,” she said.
Kelvin Tang, the president of KrisEnergy Cambodia, told Khmer Times in April that since becoming an operator in late 2014, the company has worked with the government to finalise all the terms of the revised production sharing contract. He said that many government departments, including the Ministry of Mines and Energy and the Ministry of Economy and Finance, were involved because the agreements cover fiscal issues, government participation and operational terms.
“As this is Cambodia’s first oil development, many external parties have been advising the government and we, as a responsible operator, have taken time to make sure that all stakeholders are on a level playing field to avoid any misunderstandings. We appreciate that the Apsara oil development will be keenly watched,” said Tang.
Last November, KrisEnergy announced the completion of buying a 42.75 percent working interest in the Block A offshore energy concession, which made them a majority owner in the project, with overwhelming control of 95 percent of the stakes.