The National Petroleum Authority estimates that there are 2.7 trillion cubic feet of petroleum reserves in Cambodia’s offshore Block A, Men Den, the authority’s director of exploration and production, said Wednesday.
US-based Chevron and Japan-based Moeco have been exploring for oil in Block A, off the coast of Sihanoukville, since 2002 and in January announced findings in four wells.
“The reserves estimate [of 2.7 trillion cubic feet] is 80 to 90 percent real,” Men Den said.
Men Den said that based on experience in Thailand, 1 million cubic feet can produce 45 barrels of condensation-which is commonly known as crude oil. By this calculation, Cambodia may have up to 121.5 million barrels of crude oil, worth $7.7 billion on today’s market. Light crude oil traded at $63.53 per barrel in New York on Tuesday.
Men Den said his department is evaluating the costs and benefits of various uses of the reserves for a report due in April.
Once the government study is finished, meetings with Chevron’s study team will commence to determine the best commercial plan.
“We are examining the rate of return on, for example, using natural gas to generate electricity for the domestic consumption, sending it to Thailand via a pipeline, or a [liquefied natural gas and liquefied petroleum gas] facility in Sihanoukville,” he said.
Key to the study is finding the size of potential markets for natural gas, crude oil or electricity made from natural gas.
The electricity market would depend on the ability to sell electricity to Vietnam or to Phnom Penh via a national grid, he said.
Men Den said Cambodia’s oil is rated “light.” Light oil is more expensive than heavy oil.
It is yet to be determined what proportion of Cambodia’s Block A petroleum is gas and what proportion is oil, he said.
If crude oil is produced, Chevron and Moeco would give 67 percent of profits to the government, after costs are recovered. The government taxing between 25 percent and 50 percent of the rest, subject to negotiation.
