Singapore's KrisEnergy has signed fiscal and technical agreements with the Cambodian government for the country's first oil field development in offshore Block A in the Gulf of Thailand.
The Cambodia Block A contract area covers 3,083 sq. km over the Khmer Basin in the Gulf of Thailand where water depths range between 50 metres and 80 metres.
KrisEnergy, the operator of the Cambodia Block A since 2014, plans to develop the Apsara area in the north eastern section of the concession, which is one of seven geological trends in the licence where there is potential for oil and/or gas to be trapped.
Under the terms of the deal, KrisEnergy has 60 days to declare a final investment decision thereby signalling the formal launch of the Apsara project, which is expected to take up to 24 months to produce first oil.
“The signing of the fiscal and technical agreements between the Government and KrisEnergy for oil production in Block A is the culmination of years of work and endeavour by all parties involved and we are very proud of the outcome. Producing Cambodia’s first oil in its offshore waters will be a major step along our steady road to economic development and national prosperity and is aligned to the Government’s key development goals,” said H.E. Meng Saktheara, Secretary of State for the Ministry of Mines and Energy and Chairman of the Inter-Ministerial Committee for Block A.
Phase 1A of the Apsara development consists of a single unmanned minimum facility 24-slot wellhead platform producing to a moored production barge capable of processing up to 30,000 barrels of fluid per day with gas, oil and water separation facilities on the vessel.
Kelvin Tang, KrisEnergy’s chief operating officer and president of the Company’s Cambodian activities, said: "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.”
Jean-Baptiste Berchoteau, research analyst, Asia upstream, Wood Mackenzie commented: “KrisEnergy is expected to make a Final Investment Decision (FID) in the next two months and aims to deliver first oil two years after FID. Given the relatively small size of the field, executing the project on time and on budget will be crucial to achieving a positive return on the investment. In order to generate much-needed cash flow and reduce capital expenditure, it has announced its intention to farm-out up to half of its stake in the block. With the fiscal terms for the block now clarified, we expect interest in the project from both local and international players.”