Singaporean oil and gas company KrisEnergy has decided to give up one of its oil exploration blocks in Vietnam to focus on its operations in Cambodia.
The company said in a news release that KrisEnergy Vietnam has entered into a farm-out-agreement with a major oil and gas company for the transfer of its 100 percent working interest in the Block 115/09, located off Vietnam, offering a sharing contract in exchange for a nominal cash consideration. The company that will acquire KrisEnergy’s Vietnam block and its price have not been disclosed. Block 115/09 was first acquired by KrisEnergy from Vietnam Oil and Gas Group (Petrovietnam) in 2014. Under the agreement signed between the two parties, KrisEnergy was awarded 100 percent working interest and operatorship of the production sharing contract (PSC) of Block 115/09.
Block 115/09 covers an area of 7,382 square kilometres in the southern Song Hong Basin. Last year, Eni, an Italian oil and gas company, announced that it had discovered the presence of gas in Block 114 of the same area.
“The PSC has an initial four-year term, with an associated work commitment of reprocessing 3,000 kilometres of existing 2D seismic data, the acquisition and processing of 850 square kilometres (sq km) of 3D seismic data and a single exploration well,” KrisEnergy revealed in a statement to the media at the time.
KrisEnergy said the transfer of Block 115/09 will lessen its liabilities and allow it to focus more on Cambodia.
“The consideration was arrived at by taking into account that the transfer of the exploration block reduces the company’s liabilities and mandatory work commitments comprising a 3D seismic acquisition programme of at least 850 sq km along with the processing of data and the drilling of one exploration well,” the news release stated.
KrisEnergy has been struggling financially, according to court reports. In September last year, the High Court in Singapore gave the company a three-month reprieve while it restructured debt amounting to $476.8 million.
“The board believes it is more prudent to allocate KrisEnergy’s limited capital to fund near-term development, in particular the development of the Apsara oil field in Cambodia Block A,” it added. “The transfer is in the group’s ordinary course of business and does not change its risk profile.” it added.