Lacking the infrastructure needed to process the commodity, Cambodia will have to sell its crude oil when it starts producing later this year, the Ministry of Mines and Energy said yesterday.
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KrisEnergy is expected to extract the first drop of crude oil late this year or early 2020, but that oil will not be refined in Cambodia, Meng Saktheara, secretary of state at the Ministry of Mines and Energy, told reporters during a press conference yesterday.
“We won’t be able to process the oil in the beginning because we don’t have the facilities we need,” Mr Saktheara said. “KrisEnergy will have to ship the oil abroad.”
The oil will be extracted from the Apsara oilfield, located in Block A of the Khmer Basin in the Gulf of Thailand. Apsara will become the first productive oilfield in the country.
In the first stage, three platforms will come online: 1A, 1B, and 1C.
1A platform, composed of 20 wells, could extract an estimated 8 million barrels of crude oil in its lifetime.
“By end of this year or early next year, the first well will become operational in 1A platform,” Mr Saktheara said.
In 2014, Singapore-based KrisEnergy, which already had a minority share in the exploration area, purchased a controlling interest in Cambodia’s only offshore oil reserves for $65 million from US oil giant Chevron.
According to a report by Oxfam and Cambodian For Resources Revenue Transparency, the first phase could stretch six years with an expected gross oil recovery of only 8.6 million barrels.
The report says that if the final fiscal terms remain the same as those that are now publicly available, potential revenues to the government during the entire first phase of six years could amount to around $90 to $120 million at oil prices of $70 and $90 per barrel.
Lim Solinn, Oxfam country director, told Khmer Times yesterday that the economic benefits of the operation will be substantial whether Cambodia processed the oil or exports it.
“Of course it would be better if we can process the oil locally, as it would be cheaper than the oil we import. Although the infrastructure is not ready, we can still benefit substantially by selling the oil abroad.”