Oil has been discovered in four exploration wells in Cambodian territorial waters, US energy giant ChevronTexaco has confirmed.

The company announced yesterday that a consortium led by its local affiliate has found oil in four wells drilled off Sihanoukville in the 6,278 square kilometre Block A field.

ChevronTexaco Overseas Petroleum president John Watson said preliminary results from the four wells were promising.

"As a new exploration area for ChevronTexaco, Cambodia could offer the potential to build upon our already very strong position in the Gulf of Thailand," Watson said.

And ChevronTexaco's Asia South Business Unit director Keli Taureka said the find was very encouraging, "especially given that prior to us acquiring the block it had been explored through nine previous wells.

"However, it is important to complete the drilling program and fully assess the well results to determine the potential commerciality of the finds," said Taureka.

The three-company consortium was awarded the Block A field, which includes the Khmer Basin, by the government in March 2002.

Chevron Overseas Petroleum (Cambodia) Ltd holds a 55 percent controlling interest in the field, followed by Moeco Cambodia Ltd with 30 percent and LG Caltex Oil Co with 15 percent.

National Assembly president Prince Norodom Ranariddh informed members of Parliament last month about three of the deposits. Ranariddh said one held a lot of oil and the other two would provide average outputs.

Ranariddh confirmed the deposits were located in Cambodian territorial waters, saying "That region is not located in the overlapping territorial waters with Thailand."

The current drilling program commenced with a 3,472-metre well in October last year, and will finish with a fifth well next month. Testing indicates the oil is 44 degree API crude.

A 2003 Dow Jones report from South Korea estimated reserves in the Block A field at 400 million barrels of oil and three trillion cubic feet of natural gas.

The government has said Cambodia could realize $500 million per year from the exploitation of Block A's oil and natural gas reserves.