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Logo of Phnom Penh Post newspaper Phnom Penh Post - Firm date set for oil flow

Firm date set for oil flow

THE long-awaited production of oil in Cambodia is scheduled to commence in December 2012, a leading government official said yesterday, following positive results from off-shore drills.

Deputy Prime Minister Sok An, chairman of the Cambodian National Petroleum Authority, is reported to have set a production date at a speech made to Puthisatra University students at Raffles Le Royal Hotel in Phnom Penh yesterday.

“We hope have the first drop of oil produced on December 12, 2012, at 12am,” he said in a statement, later confirmed by spokesman at the Council of Ministers Phay Siphan.

A source told the Post that the comment came after a high-level CNPA meeting with firms with interests in offshore Block A – a 4,709-square-kilometre area of the Gulf of Thailand.

Interests in Block A are held by energy giant Chevron, which operates the concession and has a 30 percent stake, Japanese Mitsu Oil Exploration Cooperation (Moeco), which also holds 30 percent, Kris Energy with 25 percent, and South Korea’s GS Caltex with 15 percent.

In April, Prime Minister Hun Sen ordered Chevron to start production by 2012 or forfeit its licence.

According to the source, four shareholders from the companies took part in a review with the CNPA on Friday in which positive results from three drill wells in the block were reported.

The companies are expected to submit a final production report on September 18, the deadline for the renewal of their exploration licence, the source said.

He added that the shareholders have expressed concern over apparent disparities between a taxation law and the draft Petroleum Law – which they hope is a “priority” for National Assembly approval.

Chevron spokesman Gareth Johnstone did not respond to an emailed request for a detailed update on extraction progress in Block A and did not confirm a production date had been set yesterday.

However, he did state in an email that: “We are aligned with the Royal Government of Cambodia desire to see production from Block A as soon as economically possible.

“The first oil date is reliant on a successful exploration program, and is dependent on achieving key milestones.”

Te Doung Tara, head of CNPA, could not be reached for comment yesterday.

In a letter dated June 9, Sok An confirmed to the Sam Rainsy Party that 23 companies have been awarded rights to explore for oil in Cambodia, although not all of them are still operating.

He also confirmed that Total had paid US$28 million for a concession, $20 million of which was a signature bonus, with $6 million to be paid into a social-development fund, and another $2 million earmarked for administrative purposes.




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