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Malaysian firm’s exploration contract nixed

Malaysian firm’s exploration contract nixed

The Cambodian government has terminated the contracts for the exploration of two off-shore oil blocks in the Gulf of Thailand as the firm in charge of these blocks made little or no progress, a Ministry of Mines and Energy official said yesterday.

Malaysian firm Resourceful Petroleum Limited (RPL), which owns both offshore Block B and Block F, will have its contract terminated and will not have a chance to reapply for control of the blocks, Ministry of Mine and Energy spokesman Meng Saktheara said.

“The company did not perform its obligations under the agreement. They do not have a chance to get it back,” he said.

Block B was initially a joint venture between RPL and Thai firm PTT Exploration and Production, while Block F was owned by Chinese National Offshore Oil Co (CNOOC), one of China’s largest oil companies. Both shares were transferred to RPL in 2013, according to Saktheara.

The two remaining assigned offshore blocks are Block A, owned by Singapore-based upstream oil and gas firm KrisEnergy Ltd, and Block D, which is owned by CPHL Cambodia, the local partner of Singapore-listed oil and gas company Mirach Energy Ltd.

KrisEnergy is reportedly making progress in negotiations with the government toward securing a production licence, but Saktheara said prospects for the CPHL-owned Block D were not very positive.

“We are actually not happy with their progress and have already sent a letter to the company to push them,” he said. “We will give them a chance to respond before deciding.”

Saktheara attributed the sluggish progress on these oil blocks to the slump in global oil prices, which was reducing the incentive for oil and gas companies to push ahead with exploration activities.

He added that the government currently had one active onshore block. PetroVietnam, a Vietnamese state-owned oil and gas firm, is exploring Block 15 and is set to conduct exploratory drilling later this year.

Richard Stanger, president of the Cambodia Association for Mining and Exploration Companies, said worldwide exploration firms were scaling back their operations on account of the dip in oil prices. He said it was not surprising that these firms were facing the same problems as well.

“But with exploration, that will change and we will see more activity once prices are higher,” Stanger added.

Brent Crude prices were just above $28 a barrel yesterday, down from its high last year of $67.77 per barrel.

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