Singapore-listed oil and gas exploration firm Mirach Energy is facing “some challenges” in negotiating the terms for exploring its Cambodian offshore oil and gas concession, following approval by the Ministry of Mines and Energy (MME) to extend its exploration period of Block D through the end of 2018, the company said in a disclosure document.
“[Mirach] had been in the midst of finalising the details on the exploration drilling project and drilling rigs commissioning arrangements with various partners.
However, this has been met with some challenges from Q4 2015 of which further negotiations on financial arrangements with MME are currently still pending their final decision,” it said in comments accompanying a 2015 financial statement released on Tuesday.
The company added that it would proceed with exploration once it received the ministry’s approval of the proposed financial arrangements.
Singapore-based Mirach owns a 48-per cent interest in its associated local partner, CPHL (Cambodia) Co Ltd, which secured the concession agreement for offshore Block D in March 2006.
The agreement granted CPHL, previously doing business as China Zhen Rong Cambodia Energy, sole exploration rights of the block for seven years, and production rights for 30 years.
Last August, the government agreed to extend CPHL’s exclusive exploration rights through 2018.
The company is working with two subsidiaries of China’s Landocean Energy Services Co – PST Service Corporation and Chengdu Western Union Petro Engineering Technology – to drill exploratory wells in Block D.
The offshore block, covering 5,500 square kilometres in the Gulf of Thailand, was estimated by Mirach to contain 1.75 billion barrels of oil.
Meng Saktheara, secretary of state at the Ministry of Mines and Energy, cautioned that the estimate was highly speculative given the low level of exploration.
He said his ministry was disappointed with the pace of exploration in Block D, but that he was not aware of any pending ministerial decisions that were preventing its operator from exploring the block.
“We are not in any negotiation with CPHL right now, and we don’t deal with [Mirach] because CPHL is the contractor on the block,” he said.
Saktheara said that low world oil prices were discouraging investment in oil exploration, hindering progress on all blocks, including Block D.
“We would hope to have made some discoveries of oil fields in the block by now, but it has not reached that stage,” he said.
“However, it is a very difficult time for everyone. They [oil exploration firms] are all suffering.”
Mirach Energy did not respond to a request for comment yesterday.