The government revoked the offshore oil exploration license of CPHL (Cambodia) Co Ltd after the project failed to meet the terms of its petroleum agreement, a state official said yesterday.
Meng Saktheara, secretary of state at the Ministry of Mines and Energy (MME), said his ministry notified CPHL last week that it had cancelled the company’s contract to explore for oil in Block D, an offshore concession spanning 5,500 square kilometres in the Gulf of Thailand.
“There was communication between the ministry and the contracting party about the failure of the company to fulfil the obligations of its petroleum agreement,” he said.
“And because of this failure it was decided to terminate the contract.”
Singapore-based Mirach Energy Ltd, which owns a 48-per cent interest in CPHL (Cambodia) Co Ltd, announced in a filing on Thursday that it had lost its Block D licence. It added, however, that MME had granted it a six-month exclusivity window during which no other investor would be allowed to bid on the concession.
CPHL was “given priority to apply for a new petroleum agreement for Block D on certain terms and conditions, including that of getting new investment partner(s) to bid for Block D under a joint venture,” it said in the filing.
In 2006, Cambodia granted CPHL, then doing business as China Zhen Rong Cambodia Energy, sole exploration rights of Block D for seven years, and production rights for 30 years. Last August, the government agreed to extend CPHL’s exclusive exploration rights through 2018.
However, in recent months the ministry has pressed the company to step up its exploration work and settle its financial obligations.
Saktheara confirmed that CPHL would be permitted to reapply for the Block D license, but only after “fulfilling its physical and financial obligations to the Cambodian government.”
He declined to specify the conditions and fees involved, but said the company was aware of them.
In its 2015 financial report, Mirach said exploration of the block had “stalled” while awaiting a response from MME on a proposed financial arrangement.