Updated: KrisEnergy signs Cambodia's first oil field development project

SINGAPORE-LISTED KrisEnergy and the Royal Government of Cambodia have signed the fiscal and technical agreements for Cambodia's first oil field development in the Gulf of Thailand.

As reported earlier, the Cambodian government will own a 5 per cent of the participating interest in the Cambodia Block A offshore oil project, while KrisEnergy will hold the remaining 95 per cent interest.

The agreements also trigger the second relinquishment phase of the concession, where 1,626 square kilometres, or about 25 per cent of the Cambodia Block A area, is returned to the authorities, leaving 3,083 square kilometres under the operatorship of KrisEnergy.

Cambodia Block A covers an area of 4,709 square kilometres in the Gulf of Thailand over the Khmer Basin, about 150 kilometres from Cambodia's mainland where water depths range between 50 and 80 metres.

KrisEnergy, the operator of the Cambodia Block A since 2014, plans to develop the Apsara area in the north eastern section of the concession, which is one of seven geological trends in the licence where there is potential for oil and/or gas to be tapped. Under the terms of the agreements, KrisEnergy has 60 days to declare a final investment decision thereby signalling the formal launch of the Apsara project, which is expected to take up to 24 months to produce first oil.

Meng Saktheara, Secretary of State for Cambodia's Ministry of Mines and Energy and Chairman of the Inter-Ministerial Committee for Block A, said,"Producing Cambodia's first oil in its offshore waters will be a major step along our steady road to economic development and national prosperity and is aligned to the government's key development goals."

Kelvin Tang, KrisEnergy's Chief Operating Officer and President of the Company's Cambodian activities, said the Apsara project marked only the first phase of the development of Cambodia Block A, and there were further potential in other geological trends within the contract area for future investigation.

KrisEnergy was trading around S$0.121 a share, up 0.5 Singapore cent, or 4.310 per cent, before it requested a halt in the trading of its shares. More than 5 million shares changed hands.