Singapore-listed oil and gas firm KrisEnergy announced on Friday it had made a final investment decision (FID) to proceed with the first phase of development of the Apsara oilfield, the first hydrocarbon development project in the Kingdom.
KrisEnergy and the government reached an agreement in late August, granting the company the right to develop the Apsara oilfield, which is in an area known as Block A in the Gulf of Thailand. Phase 1A of the project envisages an unmanned, 24-slot wellhead platform producing to a moored barge capable of processing up to 30,000 barrels of fluid per day. Oil will be sent via a 1.5-kilometre pipeline for storage to a permanently moored storage and offloading vessel.
Kelvin Tang, KrisEnergy’s CEO, said FID is another step in progressing the Apsara development within the target timeframe following the formal signing of the petroleum agreement in late August. “Our technical and operations teams are preparing the necessary tenders for materials, equipment and services,” he said. “In parallel, consultations continue with parties interested to join this groundbreaking project to reduce our operational risk and capital expenditure exposure.”
Economy and Finance Minister Aun Pornmoniroth said the agreement with KrisEnergy was “the starting point of a very long journey which requires participation from all related parties to realise the production of the first drop of oil in Cambodia”. He also said the agreement package for the development of Block A will enable the company to start its first oil production in phase 1A and phase 1B and move on towards the appraisal as well as the development plan for phase 1C. “It is estimated that phase 1A and phase 1B will provide more than 30 million barrels over the period of nine years,” added Pornmoniroth.
KrisEnergy is the operator of Block A and holds a 95 percent working interest. The Ministry of Economy and Finance holds the remaining five percent. “The five percent share of the Cambodian government with KrisEnergy is to help the government establish a participating interest. It is to allow them to sit just across the table not as regulators but also as partners,” said Tang. “I think if KrisEnergy gained a 100 percent share, the government would still be able to reap the benefits of oil production from taxation, royalty and profit and cost sharing,” he added.
An agreement to transfer 28.5 percent and 14.25 percent working interest in Block A from Mitsui Oil Exploration and GS Energy Corporation, respectively, to KrisEnergy, was signed on August 31, 2016, and completed on October 7, 2016. Block A covers 3,083 square kilometres over the Khmer Basin in the Gulf of Thailand where water depths range between 50 and 80 metres.
Once the initial Phase 1A platform is on stream, there will be a period to monitor reservoir performance before commencing Phase 1B, which envisages up to three additional platforms producing to the Phase 1A facilities. Phase 1C will potentially add up to six additional platforms for a maximum of 10 platforms.