The Ministry of Mines and Energy confirmed on Monday it had decided to terminate an offshore petroleum deal with a Singapore-based firm, suggesting the company was not holding up its side of the bargain.
Mirach Energy, which had a 48-percent stake in the 5,500-square-km Block D off the coast of Sihanoukville, first announced the ministry’s decision in a statement on Thursday.
On Monday, ministry spokesman Meng Saktheara confirmed the decision but offered few details.
“The company [has] a reason not to explain, and this is probably why I cannot explain anything to you,” he said.
Mr. Saktheara said, however, that the deal was not scuppered by disagreement over the fees the government would charge the firm, because those had already been worked out.
“It’s a question of implementing the work plan,” he said. “We had some disagreements about how the company was fulfilling the obligations under the agreement.”
He said the obligations covered “financial and technical” issues but declined to elaborate.
Mirach did not reply to a request for comment.
In its statement on Thursday, the firm said the ministry would give Mirach priority over the next six months to apply for a new agreement “on certain terms and conditions, including that of getting new investment partner(s)
to bid for Block D under a joint venture.”
Mr. Saktheara said he did not know whether Mirach had indeed been urged to find new partners for the block but suggested that another arrangement with the firm was not out of the question.
“We do allow some kind of cooling period for the company to come up with a response,” he said.
CPHL Cambodia, of which Mirach owns nearly 50 percent, has held production rights to Block D since 2006. But the project has made little headway since it was given initial environmental clearance in late 2014.
KrisEnergy, another Singapore-based firm, hopes to be the first to start oil production in Cambodia in 2018, with a controlling stake in Block A, which also lies offshore. However, low global prices of crude are expected to delay oil projects across the country.