With the kingdom still waiting to produce its first drop of crude oil, a new exploration agreement in the Apsara oilfield signed yesterday could open the way for another milestone deal in Cambodia’s extractive industry.
Speaking during the final day of a convention of the Ministry of Mines and Energy yesterday, Minister Suy Sem revealed that it has given a green light to a Chinese Canadian venture to conduct feasibility studies on Apsara offshore oilfield’s Block D.
The move is only the first step to a possible extraction agreement in the future, said Cheap Sour, director-general of the petroleum department, who added that negotiations between the parties are ongoing.
Mr Sour explained that the rights to the area already belonged to another investor, but that they recently revoked its licence “because of a sharp decline in the price of oil and the company’s inability to meet out requirements.
“But now a new investor has requested an agreement of negotiation over Block D.”
Mr Sour said that Cambodia’s extractive industry is performing very well, pointing out that there is other companies, mainly from China and Australia, that have also expressed an interesting in the country’s oil resources.
KrisEnergy, the Singaporean oil and gas company operating Block A, announced in October that it has reached a final investment decision to proceed with the first phase of development for the Apsara oilfield, and expects to begin oil production in 2019.
Meanwhile, an oil refinery plant is expected to come online by late 2019. The factory is a joint venture of Cambodia Petrochemical Company (CPC) and a Chinese firm and will cover 365 hectares of land in the provinces of Preah Sihanouk and Kampot.
“Now they are busy with construction and shipping materials to the site,” Mr Sour said. “As planned, we expect operations to begin in 2019 with a production capacity of around three million tonnes per year, which will eventually expand to 8 million by 2023.”
The plant will use crude oil extracted from Block A, said Mr Sour.
The Cambodian government in also working out an agreement with a Malaysian firm over the rights to Block C. However, negotiations have stalled, Mr Sour said, adding that both parties will resume talks in April.
The launching of extraction operations at Block A has been delayed multiple times. The original goal was to draw the first drop of oil by 2012. The deadline was later postponed to 2015, and now 2019.