A Japanese company has struck Cambodia's first oil and gas, raising its optimism

that it will be able to sink a commercially-viable off-shore well.

Campex

said the oil found at its test well Apsara 1, 155 km southwest of Sihanoukville,

was good quality crude but was contaminated by wax impurities.

Samples of

both the oil and gas are now undergoing further tests in Singapore and Malaysia.

Campex administrator Ryoichi Nakamoto estimated oil could be extracted

from Apsara 1 at 500 barrels per day but at least 2,000 bdp were needed to

warrant commercial extraction.

However he added: "This has made us very

hopeful that we will be able to get into production. Our company believes we

have the best site in Cambodia."

The strike was made on the third test

bore at Apsara 1, which is 3310 metres deep. Nakamoto declined to say at what

depth the oil was found.

Campex signed a five-year exploration deal with

the government in Dec 1991, which is due to expire at the end of next year.

The company has the rights to the 36,600 square km "Block 3", one of

five adjoining areas in the Gulf of Thailand designated for

exploration.

Drilling on a second well, called Devada 1 and 15 km east of

Apsara 1, began on Feb 6 and is expected to continue for 80 days.

Like

Apsara 1, it will be conducted by the drilling ship Ocean Clipper which is being

leased from the Singaporean-based Diamond Offshore company. Each well costs $8

million to sink.

Nakamoto said the company would wait for the results

from Devada 1 before deciding whether to sink another well in the Devada field,

return to the Apsara, or search in a third area within its block.

Campex

is a consortium of four Japanese companies. The state-owned Japan National Oil

Corporation has an 80 percent stake, the Japan Petroleum Exploration Co has 10

per cent and the trading firm Nissho Iwai and the refinery company Taiyo Oil

have five percent each. The consortium has a total capital of $13.6

million.

The company will divide any commercial oil find up with the

Royal Government. Mr Nakamoto declined to say what each side's share would be

under their deal.

A source at the Ministry of Industry, which oversees

oil exploration, said the government will be taking approximately 70 per cent of

all revenues accrued from a commercially-viable well.

The British

companies Enterprise Oil and Premier own the rights to two and one blocks

respectively, to the north and south of the Japanese block.

Enterprise

has begun drilling its first well and Premier is expected to start in

April.

The rights to the fifth and northern-most block are currently open

after the Hungarian company Nawa pulled out. It failed to raise the capital for

a test well.