Mirach Energy, the Singapore firm with a 48-percent stake in one of Cambodia’s offshore oil fields, announced last week that the government had canceled its deal with the firm and invited it to reapply with new investors.
CPHL Cambodia (CPHLC), of which Mirach owns nearly half, has held production rights to the 5,500-square-kilometer Block D off the coast of Sihanoukville since 2006. But the project has made little headway since the corporation was given initial environmental clearance in late 2014.
In June, Mirach announced a deal with two Chinese firms, PST Service Corporation and Chengdu Western Union Petro Engineering Technology, to provide it with technical services during exploration.
In a statement on Thursday, Mirach said the Cambodian Ministry of Mines and Energy (MME) informed it that day that their arrangement was over.
“MME noted in the letter to CPHLC that it had terminated the petroleum agreement of Block D with immediate effect,” it said. “As CPHLC were only notified of such a decision today, the company and its associate would explore and discuss the options viable for the company before making a decision on the steps to be taken going forward.”
According to the statement, the ministry has given the firm 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.”
Meng Saktheara, a spokesman for the Mines and Energy Ministry, declined to comment on Sunday.
In its 2015 financial report, Mirach said it was unsure of when it could begin drilling because the ministry had yet to decide on fees for the block. It said the project was facing “challenges” and that “further negotiations on financial arrangements with the Ministry of Mines and Energy are still pending.”
Cambodia’s most promising oil reserves lie in the larger offshore Block A, where KrisEnergy hopes to start producing in 2018 at the earliest. But industry analysts say low global crude prices are likely to delay all oil projects across the country.