Cambodia starts first crude oil production after years of delays (updated)

KrisEnergy

30/12/2020 05:47

(Adds expected production rate in last paragraph)
    PHNOM PENH, Dec 29 (Reuters) - Cambodia has begun extracting
its first crude oil from fields in the Gulf of Thailand, in a
venture between Singapore's KrisEnergy Ltd  KRIS.SI  and the
government, both parties said on Tuesday, bringing an end to
years of delays.
    Prime Minister Hun Sen announced the news on social media
while KrisEnergy said the concession started production on
Monday and would progress in phases once new wells were
commissioned and completed.
    "I ... am pleased to inform all Cambodians about the start
of Cambodia's first oil production in the long-awaited Block A,"
Hun Sen said on his Facebook page. 
    Kelvin Tang, chief executive of KrisEnergy's Cambodian
operations, called the event "an important strategic milestone"
for the company.
    "There has been a steep learning curve for all involved,"
Tang added in a statement.
    Cambodia and Singapore-listed KrisEnergy signed a pact in
2017 to develop 3,083 sq km (1,190 sq miles) of the Khmer basin
in the Gulf of Thailand known as Block A.
    Cambodia has struggled to develop its oil fields as few
companies were willing to invest in the area following a global
oil price slump in 2014.
    KrisEnergy, which has been a partner in the project for more
than a decade, bought out Chevron Corp's operating interest in
Block A in 2014 for $65 million.
    Chevron had found oil in the block in 2004 but failed to
strike a development agreement with Cambodia, which has a 5%
stake in the venture with KrisEnergy. 
    Earlier, KrisEnergy had anticipated oil production from the
Aspara field to start some time last year. 
    On Tuesday it said development of that field would proceed
in phases, allowing time to mitigate risks as well as collect
and assess data, since the production performance of the basin
is unproven.
    The company forecasts peak production of 7,500 barrels per
day from a total of five development wells planned to be drilled
and commissioned for its mini phase 1A development, spokeswoman
Tanya Pang said in an e-mail on Wednesday.

 (Reporting by Prak Chan Thul; Additional reporting by Shu Zhang
in Singapore; Editing by Martin Petty and Clarence Fernandez)
 ((prak.chanthul@thomsonreuters.com; +855 12 666 297; Reuters
Messaging: prak.chanthul.thomsonreuters.com@reuters.net))