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Logo of Phnom Penh Post newspaper Phnom Penh Post - Total agreements to be signed in coming days

Total agreements to be signed in coming days

Total agreements to be signed in coming days

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French oil giant says both sides are making final checks on offshore and onshore hydrocarbon concession agreements

FRENCH oil company Total said Wednesday it would sign official agreements on two hydrocarbon concessions with the Cambodia government "in the coming days" following more than three years of discussions.

Jean-Pierre Labbe, Total's senior representative in Cambodia for exploration and production, said both sides were going over the wording of the contracts ahead of an official signing expected before the end of the month.

"It's the final reading [of the agreement] on the Cambodian side [and] on our side," he said.

Total has also sent to Phnom Penh another member of its new ventures team, Jean-Paul Precigout, to help with the process, Labbe added.
A spokesman for Prime Minister Hun Sen announced the deals from Paris on July 14, the French holiday Bastille Day, during an official visit by the Cambodian government.

"When the prime minister left Phnom Penh [for France] his decision was made," Labbe said.

The agreements relate to two blocks: the 2,430-square-kilometre offshore Area III in the Gulf of Thailand, the ownership of which is still under dispute between Bangkok and Phnom Penh, and onshore Block 26, a 22,050 square-kilometre concession that cuts through Phnom Penh as well as Kep, Prey Veng, Svay Rieng, Kandal, Takeo, Kampot, Kampong Speu and Kampong Chnnang provinces.

When the prime minister left Phnom Penh [For France] his decision was made.

Labbe said Total would sign a 10-year conditional petroleum agreement (CPA) for Area III, the terms of which prevent the company from undertaking any exploration work until a resolution is reached with Thailand.
Bangkok has already allocated the area - which it calls B10 and B11 - to Chevron of the United States and Japanese company Mitsui. Labbe said that he expected some kind of joint-development agreement would be required between Cambodia and Thailand rather than geographical separation of the total 27,000-square-kilometre offshore area that is still under dispute.
"In the sea it's very difficult [to demarcate]," he said.

In regards to onshore Block 26 - which Labbe acknowledged will be a difficult area to explore - Total will be able to begin work almost immediately, but it will take about 10 years before any oil or gas could be produced, he said, if at all.

"We will start with a two-year programme of geological study," Labbe said, adding that an environmental impact assessment would also be conducted early on.

Few onshore agreements
In a study published in March on Cambodia's oil and gas resources, UBIFRANCE et les Missions Economiques said that Block 26 "may ... have an interesting geology", adding that Block 12 west of Tonle Sap Lake was the only onshore concession thus far granted in Cambodia.

MedcoEnergi of Indonesia signed an agreement with the government in September 2007 for a 52.5 percent stake in the Block 12 concession. The Cambodian National Petroleum Authority controls 40 percent of the concession and JHL - a company registered in the Bahamas on which "little information is available" - holds the remaining 7.5 percent.

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