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Production of oil to start in 2019, says official

Sum Manet / Khmer Times Share:
Kelvin Tang, president of KrisEnergy, with Suy Sem, the Minister of Mines and Energy. KT/Chor Sokunthea

Cheap Sour, the director-general of the General Department of Petroleum at the Ministry of Mines and Energy, said Cambodia will be ready to commercially produce oil in early 2020, while exportation may also be in the pipeline in the future.

“Once crude oil is pumped into the refinery, the next step will be the sale of oil on the local market while exportation is also an option but regarding exportations, talks are still underway,” he said.

Oil will be extracted from the Apsara oilfield, which is located in Block A of the Khmer Basin in the Gulf of Thailand and has been identified as the first productive oil field to be brought online in Cambodia.

The project can be considered as one of the biggest engineering projects ever undertaken in the Kingdom which has for decades been dependent on imported oil from overseas to meet its energy demands.

Mr Sour said KrisEnergy, the operator, explored the field continuously after Chevron, discovering oil that can be extracted.

“After receiving a production permit from the government, KrisEnergy is currently reviewing submitted bids from contractors for oil drilling for production, and shipment companies (deal signed a month ago), as well as loading and transferring of oil.

“According to plans, the government’s inter-ministerial teamwork met with KrisEnergy, and we are told that by the end of 2019 the company will be able to produce the first oil drops in Cambodia. The commercial production will start by 2020,” Mr Sour said.

“According to the company’s report and plans so far, the project is expected to be successful,” he added.

KrisEnergy has been the partner in the block license since 2010. In 2014 it took over as the operator of the area.

In August 2017, KrisEnergy and the government signed an initial agreement to formally commence development of the Apsara Oil Field under a 95 percent – 5 percent shares basis. The KrisEnergy Group holds 95 percent and the government holds 5 percent.

In October last year, KrisEnergy announced they made a final investment decision to proceed with the first phase of development of the Apsara oilfield.

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.

During phase 1B, up to three additional platforms will be built. Phase 1C will potentially add up to six additional platforms.

According to the Ministry of Mines and Energy, foreign direct investment in the extractive industry, including some projects expected to be approved before the end of the year, now equals $1.3 billion, which makes it one of the most valuable economic sectors in the Kingdom.

Chevron has established Cambodia’s Block A license in 2002, and in 2016, KrisEnergy bought all Chevron shares on the Block A oil exploration project.

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