Logo of Phnom Penh Post newspaper Phnom Penh Post - Canada firm mulls offshore oil extraction in Kingdom’s Block A

Canada firm mulls offshore oil extraction in Kingdom’s Block A

Content image - Phnom Penh Post
Cambodia’s maiden oil wellhead platform sails away to its offshore location on August 25, 2020. SUPPLIED

Canada firm mulls offshore oil extraction in Kingdom’s Block A

Canadian-owned company EnerCam Resources Co Ltd (EnerCam) is studying the possibility of investing in oil extraction from Cambodia’s offshore Block A after the government terminated an agreement with Singapore-based KrisEnergy Ltd, after the oil and gas exploration company went bankrupt last year.

Speaking to the media on the sidelines of an oil and gas conference on July 27, Ministry of Mines and Energy director-general for petroleum Cheap Sour confirmed that the ministry was in talks with EnerCam for the potential investment.

In an effort to avoid similar speed bumps as KrisEnergy had, EnerCam “will need time”, he said, adding that the company is carefully studying and analysing pertinent data before making a decision.

“These studies are close to the stage where results can be discussed, so at a later date, we’ll announce whether the Block A project will resume, with the aforementioned company,” he added.

He shared that since oil prices began spiralling, companies from countries such as Canada, China, Thailand and Australia have contacted the government to look into the Kingdom’s potential for oil exploration, both onshore and offshore.

In Cambodia, six offshore blocks and 19 onshore blocks have been delineated for possible oil exploration.

In 2019, EnerCam received approval from the government for a 7,300sq km onshore oil and gas exploration concession.

Minister of Mines and Energy Suy Sem, who presided over the July 27 event, stressed that the government has taken “great care” in supporting and encouraging investors, by developing laws, policies and regulations in the oil and energy sector to minimise investment risks.

“The government has also encouraged both local and international investors to increase downstream investment, such as refining, importation, storage, transportation and distribution of petroleum and petroleum products to ensure supply of oil and gas to consumers and development of other sectors,” he said.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, said that with Cambodia’s considerable offshore oil potential and need for private sector investment to boost economic growth, inspiring investors and drawing them into the Kingdom’s oil market is crucial.

“The Canadian company’s interest in investing in Block A has once again raised prospects for Cambodia’s oil exploration sector.

“If the company’s studies show positive results, and the estimated recoverable volume of oil is comparable to the former company’s [KrisEnergy’s] evaluations, then the government would undoubtedly have the ability to step up investment into the public sector and increase subsidies for retail fuel,” Vanak said.

A study by the Jakarta-based Economic Research Institute for ASEAN and East Asia (ERIA) found that demand for petroleum products would increase from its 2020 level of 2.8 million tonnes, crude oil equivalent (roughly 20.8 million barrels), to 4.8 million and 8.3 million by 2030 and 2040, respectively, requiring additional investment in the sector to keep pace.

Some of the oil companies that have conducted geological surveys in the Kingdom include: Elf, Esso, Enterprise Oil, PTT, Premier Oil, Chevron, PVEP, JOGMEC and MOECO.

MOST VIEWED

  • Typhoon Noru brings flash floods – 16 dead

    An official warned that that the 16th typhoon of the season, Noru, had brought heavy rains to areas the Mekong River and flooded thousands of homes in the provinces bordering Thailand. As of September 27, the death toll from the flooding had risen to 16. National Committee

  • Siem Reap drain canal now ‘mangrove’ promenade

    A more than half a kilometre long stretch of canal in Siem Reap has been covered and turned into a promenade to attract visitors, said Ly Rasmey, secretary of state at the Ministry of Land Management, Urban Planning and Construction, on September 16. The new pedestrianised

  • Angkor wildlife, aquarium park still to open October

    The Angkor Wildlife and Aquarium complex about 30km southeast of Siem Reap town with initial total investment of more than $70 million is reportedly still on track for an end-October opening. The park is located on a 100ha plot along National Road 6 in Kbon village, Khchas

  • Defence minister reaffirms Kingdom’s staunch support for One-China policy

    Minister of National Defence General Tea Banh has reaffirmed Cambodia’s unwavering support for the One-China policy. Tea Banh was speaking at the September 20 ceremonial handover of 117 vehicles and other military equipment donated by China’s defence ministry, held at Phnom Chumreay International Military Training

  • Deaths due to ‘lifestyle’ diseases rise in Kingdom

    The Ministry of Health has called on people to pay closer attention to their health to protect themselves from non-communicable diseases (NCDs) which it said have caused high rates of deaths in the country. Ministry secretary of state York Sambath made the call at a

  • Textile industry minimum wage now $200

    The official minimum wage for workers in textile-related sectors including garment, footwear, and travel goods for 2023 was pegged at $198, with Prime Minister Hun Sen stepping in to add $2 to the total, making it $200 per month. The Ministry of Labour and Vocational Training made the announcement