It is expected to earn $ 500 million in the first phase.
On March 3, the Oil Price website reported that Cambodian Prime Minister Hun Sen had just announced on social media that the country was about to exploit oil in Block A located in the Gulf of Thailand. Via Facebook, Mr. Hun Sen wrote: “The first drop of oil has been created … In 2021, we will receive a great gift for our country.”
The exploration project is in a joint venture between Cambodia and KrisEnergy Company (Singapore) in 2017 to develop oil exploration in an area of approximately 3,083 km2 located in the Gulf of Thailand.
According to KrisEnergy, mining will begin in the southwestern location off the coast of Sihanoukville province, near the waters of Vietnam. Cambodia is expected to earn around $ 500 million in the first phase of exploitation, with a production of around 7,500 barrels of oil per day. In 2014, KrisEnergy repurchased shares of Chevron Group (US) in the region for $ 65 million.
I don’t want money to sleep on the bottom of the sea.
For decades, Cambodia has pursued the ambition to exploit offshore oil, but in turn many partners, from Chevron to PTT (Thailand) and China National Petroleum Corporation (CNOOC) have given up.
Oil has been discovered in the area since the early 2000s and Cambodia entered into a cooperative agreement with Chevron to exploit it, but the project has been delayed for many years.
In February 2009, Cambodia’s Deputy Prime Minister, Mr. Sok An, who was also head of the national oil and gas agency, had to impatiently say to the diplomatic representative of the United States: “We don’t want our money to be Fund from sea”. The aforementioned content was revealed by the telegram released by Wikileaks, according to the sheet. Nikkei Asia. The US diplomatic representative also revealed: “He (Sok An) asked the US government to urge Chevron to start exploiting the oil soon.”
Block A reserves are believed to be around 400-500 million barrels, promising billions of dollars in profits. However, in the context of the fall in oil prices, it is also estimated that the exploitation efficiency of the mentioned area decreases. The prospect of exploitation was dashed when the price of oil plummeted in 2014. And after many unsuccessful negotiations with the Cambodian government over the share ratio, Chevron withdrew and transferred its stake to KrisEnergy.
In 2017, KrisEnergy reached an agreement with the Cambodian government. Consequently, the Cambodian government owns 5% of the shares and is estimated to earn around $ 500 million when the price of oil is $ 50 / barrel. The following phases will continue to negotiate.
However, the prospects for the project were unclear until the end of October 2019, when KrisEnergy announced that it had sold its business in Indonesia to focus on the project in Cambodia. And now the plan is really viable.
According to observers, oil exploitation is considered one of the solutions for Cambodia to reduce its dependence on energy from abroad. Also, recently, the Chinese side has initiated a plan to build an oil refinery in Cambodia and this plant has become a factor that Cambodia should look forward to in the development of the oil industry, contributing to economic development. In this way, Cambodia will have more resources to exploit the oil in the Gulf of Thailand.
