US energy multinational Chevron has extended an agreement to explore in Offshore Block A, said a company spokesman, following months of negotiations after the previous deal expired in April.
The concession, located in the Gulf of Thailand, is widely considered to be Cambodia’s best chance of producing energy within the next few years, although production dates have frequently been pushed back – most recently to some time after 2013.
“Chevron welcomes the ongoing opportunity to evaluate the Block A resources,” Singapore-based spokesman Gareth Johnstone said late Wednesday by email.
He declined to provide further details on the new agreement, including its duration, citing “commercial reasons”.
Johnstone also declined to say when the new deal was signed. Government energy officials, including Te Duong Tara, director general of the Cambodia National Petroleum Authority, were unavailable for comment Thursday.
The new deal ends speculation that Chevron may pull out of Cambodia after both sides took close to a year to iron out details of the new deal.
Neither Chevron nor the government have revealed details about the negotiations and, in the longer term, the process required to bring the “complex Block A reservoir” online, although Johnstone told the Post in July: “Key requirements include having legal, fiscal, and regulatory frameworks in place, and were “inbuilding technical capability.”
During the talks, both sides were “in the process of evaluating several development options”, Johnstone said at the time.
Chevron says it has thus far spent US$125 million on seismic data in Block A, drilling at least 15 exploratory wells, according to company promotional material, since operations first began in 2002.
Following reports last week on Chevron’s downstream operations, which are scheduled to undergo restructuring this year, Johnstone refused to speculate on Chevron’s presence in Cambodia. Chevron subsidiary Caltex runs service stations in the Kingdom.
“It is important to understand that Chevron conducts a continual assessment of its asset portfolio to determine the optimal mix of assets and markets,” Johnstone said in Wednesday’s email. “No decisions on assets or markets have been made.”
The US energy firm is planning to shed retail outlets to concentrate on upstream activities, Bloomberg reported on January 19, without saying which markets would be affected.
Johnstone told the Post an announcement would be made in March and that “the new organisation will be in place by the third quarter of this year”, without elaborating further.