Singapore-listed KrisEnergy has said it needs more time to finalise negotiations and obtain the necessary financing for Cambodia Block A, the nation’s maiden offshore oil development project.
In a statement released earlier this week, the company informed its shareholders that on 1 April 2020 it applied to the Singapore Exchange Securities Trading Limited for an extension of time to hold its annual general meeting (AGM) and to subsequently issue its annual report for the financial year of 2019.
“The extension applications are necessary because of the tightening of travel restrictions and safe distancing requirements by the Ministry of Health in response to the COVID-19 pandemic. Therefore, we require more time and flexibility to finalise negotiations and obtain the financing for Cambodia Block A, while considering measures and alternative arrangements to be undertaken in connection with the annual general meeting,” it said.
KrisEnergy also said in the statement that it is continuing to work on alleviating its highly publicised financial difficulties. It was revealed in September last year that the beleaguered oil company would receive three months of court protection from creditors’ legal action over debts of nearly $480 million.
The company’s initial request for a six-month debt moratorium was rejected and measures is has taken to appease creditors include a restructuring of the debt and the giving up of one of its oil exploration blocks in Vietnam to re-route those funds to focus on its Cambodia operation.
“We are currently working towards obtaining financing for the funding of one of our near-term development projects, Cambodia Block A, which we consider to be a key asset for the restructuring of the Group,” it noted.
With the recent oil price slump and ongoing volatility, the company said it needs some time in assessing post-balance sheet events to provide a true and fair view of the Group’s financial position to its stakeholders.
Cheap Sour, director-general of the general department of petroleum at the Ministry of Mines and Energy, said the ministry has not yet received any update from the company about the move, and that as far as he knows, KrisEnergy is still set to extract oil from Cambodia Block A. The oil field is located in the Gulf of Thailand, approximately 150km offshore from Cambodia and covers an area of 3,083 sq km.
“KrisEnergy have informed us that they are importing drilling equipment for the rigs and have the necessary ships to transport equipment and machinery to the oil-field development area,” he said.
The company and the Government of Cambodia signed the long-coming petroleum agreement for Block A in late August 2017. Cambodia’s would-be oil sector has been beset by decades of setbacks as companies, ranging from U.S. giant Chevron to Thailand’s PTT, PetroVietnam and China National Offshore Oil Corp. (CNOOC) have crashed and burned.
Under the agreement, KrisEnergy holds 95 percent working interest in Cambodia Block A, with the remaining 5 percent held by the Cambodian government.
The company said that last year’s operations remained focused on maximising existing production and progressing the Apsara oil field development in Block A towards first oil extraction by mid-2020. If successful, serious attention may then be turned to the other five blocks (B – F) in the Apsara development that have oil refinery potential.
Planned capital expenditure for the first quarter this year is estimated to be in the region of $14.9 million, of which 96.1 percent will be used for production and development assets, predominantly at the Cambodia Block A concession, according to the company announcement.