With hopes mounting that US oil giant Chevron Corp will start extracting oil from Cambodian waters by the end of 2012, Mirach Energy Ltd’s Cambodia-based partner CPHL announced plans yesterday to step up exploration activities and quickly start extraction from its own offshore location.
William Chan, chairman of CPHL, said that seismic data collection in the company’s concession area located in the 5,500-square-kilometer Block D in the Gulf of Thailand had already been completed, and that the firm was now looking to drill several wells over the coming years.
“Within two or three years we will drill at least three or five wells and also we will try to find a simple way to start developing the production,” Mr Chan told reporters on the sidelines of a seminar organized by CPHL and the Cambodian National Petroleum Authority.
He said that, while it was still too early in the proceedings to reveal an estimate on the amount of oil stored in the area, production was tentatively set for the end of 2012, the same year that Chevron has said it will start extracting oil from its concession area in Block A.
“If we can get the good results I think [extraction will start by] the end of 2012,” Mr Chan said.
Despite having acquired an exploration license in 2006, CPHL has only been conducting preliminary tests in the area since March this year. It has a total of seven years’ exploration rights and 30 years’ production rights under its contract.
Mr Chan declined to state how much the company had invested in Cambodia so far, saying only that the amount was equal to “many million US dollars.” The government has never revealed publicly how much CPHL has paid to the government in fees or bonuses.
According to the website of Mirach Energy, CPHL owns a 48 percent stake in Block D.
In 2007 Mirach Energy, formerly known as China Petrotech Holdings Limited, estimated that Block D contained approximately 227 million barrels of oil and 496 billion cubic feet of natural gas.
Mr Chan also said yesterday that CPHL would be using the services of OHM Plc, which is listed on the London Stock Exchange and specializes in using electromagnetic data to locate areas below the seabed that are more likely to contain natural resources.
“In order to decrease our risk it is time to invite OHM company to work together with us and the CNPA,” Mr Chan said. “In order to decrease the drilling risk we have to use new technology.”
James Tomlinson, manager of OHM Plc, said during a presentation yesterday that while seismic data is useful in identifying structures on the seabed with drilling potential, electromagnetic data could more easily identify what is contained below the seabed.
“It gives you a way of evaluating the likelihood of drilling success in the different structures before you drill,” he said. “We’re trying to de-risk prospects before drilling.”
Officials from the Thai-owned PTT Exploration and Production company, which has an exploration license in Block B, and Polytec Resources Limited, which has a license in Block C, were also present at yesterday’s event to listen to the presentation delivered by OHM Plc.
Ho Vichet, vice chairman of the Cambodian National Petroleum Authority, declined to answer questions from reporters on the sidelines to yesterday’s event. However, in his opening remarks he raised hopes that exploration activities by CPHL would commence rapidly.
“CPHL have the intention to drill the first exploration well for this Block D very soon,” he said.
In its most recent financial statement for the six months ending June 30, profits at Mirach Energy Limited increased by 16 percent to 3.1 million yuan, or about $465,000.
The company’s share price closed flat yesterday on the Singapore Exchange at SGD $0.08, or $0.06. Mirach Energy is producing coal in East Kalimantan, Indonesia, and has another onshore oil interest in Kamundan.
