Cheveron Cambodia President Steve Glick’s arrival in Phnom Penh this week has been touted as a sign of the firm’s commitment to its offshore Block A oil project.
The company is actively exploring offshore Block A, and plans to make a final investment decision on whether to proceed by the end of 2011, according to company officials.
“Chevron is committed to this project, and building our office strength here in the Kingdom is a clear indicator of that commitment,” Glick said in a speech on Wednesday.
Gerry Flattery, who previously oversaw the Block A project, was based in Thailand.
The firm has said it expects to receive a 30-year production permit in the second quarter of 2011. Government officials have set a deadline of December 12, 2012, to begin oil extraction in Cambodia.
Cambodian National Petroleum Authority Vice Chairman Ho Vichit said the authority welcomed Glick’s arrival.
“We are pleased to see this project move ahead with the commitment that Chevron and the Block A partners have demonstrated to oil and gas development in Cambodia,” he said in a speech on Wednesday.
Company spokesman Gareth Johnstone said Chevron has indicated it is keen to move the project forward, adding: “We want to make sure everything’s in place when we do that.”
He said that the design phase of the project was ongoing, but also highlighted challenges with producing oil from its Cambodian concession.
“Block A is a challenging development as the oil is located in dispersed, small pockets,” he said.
“Unlike other reservoirs around the world where there are large deposits of oil or gas – offshore Nigeria and offshore northwest Australia are examples – Block A will require multiple wells to extract the resource,” he said.
The company drilled three successful exploration wells in Block A last year, but Johnstone emphasised it was just one of a range of factors taken into consideration when reaching a final investment decision.
He also listed three principles that apply for the firm regardless as to where it operates. Chevron requires a transparent and consistent regulatory regime, contract sanctity and adherence to the rule of law, he said.
“Taking into account all these factors, we are saying: we expect to make a final investment decision this year,” he said.