Cambodia has invited Iran to examine the feasibility of developing the Kingdom’s existing oil blocks and requested that the republic conduct further oil and gas exploration studies.
The proposal was made during a courtesy meeting between Minister of Mines and Energy Suy Sem and Iranian ambassador to Vietnam and Cambodia Ali Akbar Nazari on February 21 at the ministry.
Cheap Sour, director-general of the ministry’s General Department of Petroleum, hailed Iran as a country with significant experience as an oil and gas producer and saw the meeting as a boost to further economic cooperation between the two countries.
He told The Post that ministry leaders called on investors from the country to study the feasibility of investing in Cambodia’s existing oil blocks, as well as to explore new ones, but said that these talks were at a very early stage.
“This is a start, but it is not yet clear which investors from Iranian companies will be able to invest; it is just a diplomatic [discussion]. Now we are waiting to see,” he said.
Oil exploration at the Apsara oilfield in Cambodia’s offshore Block A has been suspended since Singapore-listed investment company KrisEnergy – which had been conducting pumping operations at the location – went bankrupt, Sour said.
KrisEnergy filed for bankruptcy in mid-2021, claiming it has been unable to pay off more than $500 million in debt. From the start of the pumping operation until its bankruptcy declaration, the company pumped nearly 300,000 barrels of oil, according to Sour. Since then, the mines ministry has been seeking to lure investors as well as research teams to the area.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, said that if the Iranian side agreed to Cambodia’s request to invest in and develop the Kingdom’s oil blocks, it would be a positive for the local oil sector, and could mean a resumption of pumping operations that were suspended due to the bankruptcy of KrisEnergy.
He added that Iran’s good qualifications and experience in the field of oil mining is something Cambodia’s own industry can benefit greatly from.
Royal Academy of Cambodia economics researcher Ky Sereyvath said that it was important for Cambodia to thoroughly explore possibilities in the oil sector because it is a resource that the Kingdom shares with neighbouring Thailand, and it was a race between the two sides to see who could capitalise on it.
“The mines ministry’s efforts to attract investors to develop the oil sector are very important [in promoting] the successful pumping of Cambodia’s oil, which we hope will lower oil prices, as well as allow the government to [generate] more revenue to help in key areas such as health and education,” he said.
At the end of 2019, Mubadala Petroleum, a major oil and gas company from the UAE, sought investment opportunities in the Cambodian oil sector, but took no further action at the onset of the Covid-19 crisis.
According to Sour, in addition to discussing cooperation on investment and development of Cambodia’s oil blocks, the two sides also made plans to study the feasibility of setting up a refinery in Cambodia, as well as explore the possibility of working together in developing technical assistance and human resource training in the petroleum sector and energy trade cooperation, investment mobilisation, and the development of electricity infrastructure.