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KrisEnergy suspends work at Wassana oil field till further notice
UPSTREAM oil-and-gas firm KrisEnergy has suspended production at the Wassana oil field in the Gulf of Thailand till further notice, in view of the many uncertainties ahead, it said on Wednesday.
These uncertainties include the duration of the Covid-19 pandemic, the speed of global economic regeneration and recovery in petroleum demand, and the magnitude and sustainability of any upturn in oil prices, KrisEnergy said.
The Wassana field in the G10/48 concession in the Gulf of Thailand came onstream in August 2015 and comprises a mobile offshore production unit (MOPU) and a floating storage and offloading (FSO) vessel. Agreements with respect to the FSO have been terminated.
KrisEnergy is in discussions regarding the warm-stacking of the MOPU with a skeleton crew, supported from the Songkhla shorebase.
Gross production at Wassana oil field averaged 3,605 barrels of oil per day (bopd) in the first quarter of 2020. The company’s working interest production was 3,208 bopd.
Due to the suspension of Wassana production, KrisEnergy will cut its workforce in Thailand by approximately 25 per cent.
KrisEnergy holds an effective 89-per-cent working interest in the G10/48 concession; Palang Sophon Offshore holds an effective 11 per cent working interest.
Operations at the KrisEnergy’s remaining producing assets – the B8/32 oil and gas fields in the Gulf of Thailand and the Bangora gas field in Block 9, onshore Bangladesh – continue as usual.
Separately, independent auditor Deloitte & Touche noted that the group's ability to continue as a going concern will depend on a few key things, including the support of its major stakeholders in a debt restructuring.
To be sure however, Deloitte's opinion on KrisEnergy's FY2019 results remains unqualified.
On April 30, KrisEnergy signed a credit-facility agreement with Kepinvest Singapore, a unit of Keppel Corp. KrisEnergy is controlled by Keppel. The lender has agreed to grant a project-financing loan of US$87 million, which will be used to fund the development of the oil field in Cambodia Block A.
"The directors and management are confident that the continued support from Keppel in respect of the Cambodia Block A development will be forthcoming," KrisEnergy said.
Trading in the KrisEnergy’s shares has been suspended since Aug 14, 2019.