PHNOM PENH, Aug. 23 (Xinhua) — Singapore-based oil and gas company KrisEnergy signed an extended-awaited production- sharing agreement with the Cambodian government on Wednesday for the primary-ever extraction of petroleum from Block A in Cambodian territorial waters.
The deal was inked here between KrisEnergy’s chief operating officer Kelvin Tang and Cambodian Industry, Mines and Energy Minister Suy Sem and Economy and Finance Minister Aun Pornmoniroth.
KrisEnergy holds a 95 percent stake in the three,083-sq-km offshore block, and the Cambodian government owns the remaining 5 percent.
Kelvin Tang said the agreement was a major milestone for Cambodia in its long journey to become an oil-producing nation.
“This is a serious step. It’s Cambodia’s first oil field,” he said after the signing ceremony.
“Shortly after the signing, we’ll declare final investment decision and proceed to deliver 1st oil in 24 month — sometime in 2019,” he said, denying to disclose the investment cost for the project.
Suy Sem said the agreement was the crucial commencement towards first crude oil production from offshore Cambodia.
“It’s estimated that Phase 1A and Phase 1B (of the stage one in all Block A) will provide more than 30 million barrels over the period of nine years, and it’s sufficient commercially to make Cambodia become an oil producing country sooner or later,” he said.
“The development of Block A can also be a catalyst to more intense exploration works in another five offshore and 18 onshore blocks,” he said.
The minister said the oil business can be a significant new impetus for social advancement, human resource development, building Cambodia’s competitive capacity, and growth of domestic production and service chains.
He added that the ministry was working hard to push forward the finalization of Law on Petroleum Sector Management and other regulations to ensure investment atmosphere and clarity within the private sector investment.
Based on Aun Pornmoniroth, the petroleum agreement was first signed between the Cambodian government and U.S. oil giant Chevron in 2002. Later on, KrisEnergy gradually increased its share in 2011, 2014 and 2016, respectively to become the principle operator with 95 percent share.