Singaporean-listed oil and gas firm KrisEnergy has agreed to buy out Chevron’s stake in an offshore site in the Gulf of Thailand for $65 million, according to a statement from KrisEnergy.
KrisEnergy, which already holds a 25 per cent share in the 4,709-square-kilometre site known as Block A, will acquire Chevron Cambodia’s 30 per cent holding, an announcement on the Singapore exchange issued yesterday says.
“Chevron, with its experience in the Gulf of Thailand, has done some tremendous work in Block A and we hope that with the KrisEnergy entity now holding operator ship, we will be able to steer the Apsara development plans forward to first production as quickly and cost effectively as possible,” Richard Lorentz, director of business development for KrisEnergy, said in the statement.
Other joint venture partners MOECO Cambodia and GS Energy Corporation have reportedly approved the deal, according to KrisEnergy. However, the Cambodian government has yet to agree to the conditions.
Contacted yesterday, Meng Saktheara, secretary of state at the Ministry of Mines and Energy, said the ministry had not yet received a formal request from the companies, but he was confident the deal would go through.
“We will examine this and if we find that it can affect the government’s advantage, we will reject this selling and buying of the share,” Sakthera said.
“However, in general, it should not be having any [negative] impact because they are all international companies,” he added.
Chevron declared in 2010 that oil reserves in Block A were economically viable. However, negotiations with the government have delayed the long-anticipated project, which could greatly reduce Cambodia’s dependency on energy imports.
Steve Glick, former Chevron Cambodia country manager, told the Post in 2011 that more than $160 million had been spent assessing the commercial viability of the offshore site, referred to as Block A.
According to the KrisEnergy statement, Chevron’s share of the site was valued using both exploration costs already incurred by the company and the potential of the oil field.
A Chevron spokesman confirmed that an in principle deal had been reached.
“Chevron is pleased to have been involved in the development of the Cambodian oil and gas industry, and are proud of having made new oil discoveries in Block A over the last 12 years,” Chevron spokesman Alex Yelland said yesterday in an email.
KrisEnergy expects to yield 10,000 barrells of oil per day from Block A when it is operational, according to yesterday’s statement.