At the government’s request, US oil giant Chevron has set a 2012 target date to produce oil off the Cambodian coast, eight years after the company first announced it had discovered petroleum resources in Cambodian territorial waters, a company representative said yesterday.
“We’re in the early stages of design studies to produce oil for Cambodia before the end of 2012,” said Gerry Flaherty, a regional exploration manager for Chevron Corp.
Chevron, which in January reported fourth quarter earnings of $3.07 billion, representing a 39 percent drop year on year, plans to drill three more exploratory wells off the coast next month, bringing the total to 22, according to Mr Flaherty.
The initial exploration period in the 4,709-square-km exploration area in the Gulf of Thailand known as Block A is scheduled to end in September, Mr Flaherty said, speaking at an event in Phnom Penh to launch a charitable program sponsored by Chevron in Preah Sihanouk province.
The government announced in 2008 that Chevron was to start extraction in 2011. However, the government that year accused the company of dragging its feet as negotiations stalled over the tax regime that will apply to oil revenues.
As the price of oil soared well over $100 per barrel, the government that year said Chevron believed Block A contained an estimated 500 million barrels, of which 15 to 20 percent was recoverable.
In an e-mail yesterday, Chevron spokesman Gareth Johnstone declined to say whether the company has reached an agreement with the government over revenue sharing and taxes, referring questions back to the government.
Officials from the Cambodian National Petroleum Authority could not be reached for comment.
“The 2012 date was directed by government and we are doing our best to achieve that,” Mr Johnstone wrote. “Note that the date is reliant on a successful exploration program and is dependent on achieving key milestones,” he said, without elaborating.
The announcement of a target date for oil production comes after Chevron sold 25 percent of its stake in Block A to the Singapore-based firm KrisEnergy for an undisclosed sum.
Chevron initially maintained a controlling 55 percent interest in Block A, with partners Mitsui Oil Exploration holding 30 percent and the South Korean firm GS Caltex owning 15 percent.
With the other holdings remaining the same, Chevron now holds a 30 percent interest in Block A.
“From our perspective, KrisEnergy has recent experience in the development of oil fields similar to this block, and will be contributing their expertise to the development team,” Mr Johnstone wrote.
The website of KrisEnergy lists offshore operations in Thailand, Vietnam and Indonesia.
KrisEnergy’s director of business development, Richard Lorentz, wrote via e-mail yesterday that his firm received CNPA approval in mid-February to purchase the 25 percent stake in Block A.
Like Mr Johnstone, he declined to reveal the price.
Mr Johnstone also declined to comment on how many barrels of oil might be recovered from Block A once production begins.
Mr Flaherty described the reservoirs of oil in Block A as “small” and “discontinuous.”
“The geology is complicated here, so you have to drill many wells to intersect enough of these reservoirs to have a development project,” he said.
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