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Black gold on the horizon

Chea Vannak / Khmer Times No Comments Share:
KrisEnergy employees at an oil rig. KrisEnergy

The Ministry of Mines and Energy signed  a petroleum agreement with Cambodia Resources Energy Development Co on exploration of the offshore Block D oilfield.

“Signing the agreement allows the company to conduct studies and search for oil in Block D,” Cheap Sour, director-general of Petroleum at Ministry of Mines and Energy said yesterday.

Under the agreement, the company can start exploring for oil from seven to 10 years, he said, added that if the company found oil in Block D, the company could continue its programme for 30 years.

The Block D is an offshore concession spanning 5,500 square kilometers lying over the Khmer basin, an area in Cambodian waters in the Gulf of Thailand.

According to law, the petroleum agreement has a period of exploration and production for 30 years, with seven years for exploration that can be extended to 10 years.

This is the second petroleum agreements signed so far. The first, Block A, was developed by KrisEnergy.

Singapore-based KrisEnergy is currently developing the Apsara oilfield’s Block A, which is in Cambodian waters.

KrisEnergy said it plans to extract the oil in the first half of this year, because the company is already preparing the platform.

According to the ministry’s report, another petroleum agreement on onshore Block VIII is under discussion.

No commercial extraction of oil and gas has yet begun. All the petroleum products for local demand are currently imported, chiefly from Vietnam, Singapore and Thailand. Consumption has been growing – Cambodia imported 2.55 million tons of petroleum in 2015, a 64 percent jump from 2014 with even more since.

For oil and gas exploration, Cambodia has established six offshore blocks (A–F), 19 onshore blocks (I–XIX) and four blocks in an overlapping claims area (OCA) that is contested with Thailand. Offshore Block A is likely to be the first to produce oil.

The government has estimated that the field holds 30 million barrels of oil, which could be recovered over nine years. In August 2017 the government signed a production-sharing agreement with Singapore-listed KrisEnergy, which holds the rights to develop Block A.

Production of oil is slowly getting closer. In late 2018, Singapore company Keppel Offshore & Marine was contracted to modify and upgrade a production barge for use in the Apsara oil field in Block A. Oil industry publications say the barge will be able to process up to 30,000 barrels of fluid per day and be able to separate oil, gas and water. Plans for the first stage of production include a single unmanned wellhead platform and a moored production barge. Crude oil will be piped to a storage and offloading vessel approximately 1.5 kilometres away.

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