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Cambodia extracts ‘first drop of oil’, marking start of production

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Singapore’s KrisEnergy on December 28 extracted the first drop of crude oil from Cambodian waters. MINISTRY OF MINES AND ENERGY

Cambodia extracts ‘first drop of oil’, marking start of production

Singapore-based oil and gas exploration company KrisEnergy Ltd on December 28 extracted the first drop of crude oil from Cambodian waters.

The highly-anticipated milestone extraction from the offshore Cambodia Block A concession in the Khmer Basin’s Apsara oilfield makes the Kingdom the eighth oil producer in the 10-member ASEAN, with only Singapore and land-locked Laos not producing crude.

KrisEnergy on December 29 said oil started to flow from a “single development well” in the oilfield and the flow rate will take at least 24 hours to stabilise.

“Production will increase to plateau as four additional wells are progressively completed and commissioned,” it said.

Kelvin Tang, the CEO and president of KrisEnergy’s Cambodian operations, said Apsara’s first drop of oil marks a 10-year journey from when KrisEnergy initially became a partner in Block A.

“It has been three years since we signed with the government the petroleum agreement to launch this project, and there has been a steep learning curve for all involved in what is a momentous event for the Cambodian people and an important strategic and operational milestone for KrisEnergy,” he said.

With Covid-19 hanging over the world, Tang said: “Progressing Apsara to first oil has been a tremendous achievement and a testament to the determination of the KrisEnergy team and the strong cooperation of our contractors and suppliers.

“I convey my heartfelt appreciation to all relevant ministries and authorities for their assistance, cooperation and their dedication to get the Apsara oil development over the line. KrisEnergy is honoured to be a part of this historic occasion.

“Our task now is to complete drilling of the four remaining wells, stabilise production and monitor performance so that we may assess the best path forward to optimise Cambodia’s oil production and the value of the asset in the years ahead.”

Prime Minister Hun Sen on December 29 lauded the extraction as a new achievement and a new source of funds for the country’s economic development in consonance with the government’s win-win policy.

“On behalf of the Royal Government of Cambodia, it is a great pleasure to inform my compatriots that Cambodia’s first drop of oil will be produced from the A-01D well of Platform A in the Gulf of Cambodia in Preah Sihanouk province on December 29, 2020, by Singapore’s oil and gas exploration company KrisEnergy.

“Through the efforts of the government and project operator KrisEnergy, we have so far successfully installed the necessary equipment and facilities for the production process of our oil and gas resources,” he said.

Cheap Sour, director-general of the Ministry of Mines and Energy’s General Department of Petroleum, told The Post on December 29 that the five-well mini platform will reach a peak rate of approximately 7,500 barrels per day once the four additional wells are completed.

“With the positive progress, we will attract more companies into the oil and gas sector,” he said.

With its transformation into an oil producing country, the flood gates for investors and international companies into the sprouting sector have been thrust wide open.

Hun Sen stressed what a blessing Cambodia had received in the beginning of oil production.

“This is a significant step for Cambodia to build national capacity and its oil, gas and energy industries.

“Key benefits include national budget revenue, economic benefits from the diversification of the oil industry and national capacity building in the sector,” he said.

Significant and major oil production infrastructure has been built, installed and completed in Block A for the production process, the prime minister added.

This includes the construction of the oil platform on Batam Island, Indonesia, which began in December last year and was completed in August, he said. The platform arrived in Cambodia’s Block A and assembly was completed on September 7.

The oil-production vessel was installed, repaired and equipped in September in Singapore and arrived in Cambodia’s Block A on October 18, he said. The tanker was ready to operate in Block A on November 9.

The first well was completed on December 23, while two other wells have already been drilled into the oil reservoir, he added.

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