Last month’s purchase by Singapore-listed KrisEnergy of a 42.75 percent working interest in the Block A offshore energy concession made them a majority owner in the project, with an overwhelming control of 95 percent of the stakes. This acquisition is expected to accelerate the development of the project, a senior official at the Ministry of Mines and Energy said yesterday.
Meng Saktheara, secretary of state at the ministry told Khmer Times yesterday that one company having effectively sole ownership would be a boost to the plans to begin petroleum extraction soon.
“It is good news as they now totally control the project so I expect that the company will speed up their business performance, as before [the three companies involved in the stake] needed to get approval from their stakeholders about any changes,” Mr. Saktheara said.
In August KrisEnergy announced that it was in negotiations to buy out Mitsui Oil Exploration’s 28.5 percent stake, and GS Energy Corporation’s 14.25 percent stake, after the companies approached KrisEnergy to seek a sale of their shareholdings. The sale was completed on October 7, with the purchases adding to the 52.25 percent stake they owned since buying Chevron’s in 2014.
The Cambodia National Petroleum Authority still has a five percent stake in the 4,709-square-kilometer concession located in Cambodian waters within the Gulf of Thailand.
“What that they have to do now is to double check with their source of funds to implement the project because it is a lot of money,” Mr. Saktheara cautioned.
But provided funds are in order, he said that an agreement between the company and the government could be signed within the year to move closer to extraction.
“I don’t think it will take much time due to my ministry having already cleared in principle on every issue. Just a small thing left is with the Ministry of Economy and Finance and the company’s technical team meeting to discuss the investment risk – then everything is done.”
Mr. Saktheara said that projected first extraction will likely begin in about two years, at which point global oil prices should have risen.
“It is a good time for KrisEnergy to start working on their project while the global oil price slightly recovers,” he said, adding that the draft law on oil and gas extraction is due to be finalized later this year, and will hopefully be approved by the government early next year.
Tanya Pang, vice president of relations and corporate communications at KrisEnergy, told Khmer Times that they were already ready to proceed.
“We remain ready whenever the ministry gives the green light. We believe it will take around 24 months from signing the deal with the government to striking our first oil,” she said.
“Increasing our interest does not change the way we work – which is safety first. However, a bigger stake in the project will allow us to make decisions faster as we will only need to work within our company and the government’s key decision-makers and not wait on partners,” she added.
Ms. Pang stressed that current oil prices were actually good for the project.
“Long-term development projects have to be assessed not just on current oil prices but also on assessments and projections of future long-term oil price trends,” she said, “Low oil prices also come with the benefit of lower costs from oil service companies.”
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