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.