Logo of Phnom Penh Post newspaper Phnom Penh Post - Oil concerns chase four more blocks

Oil concerns chase four more blocks

Oil concerns chase four more blocks

T HE Ministry of Industry, Mines and Energy (MIME) has put out one onshore and three offshore blocks to international tender for oil and gas exploration.

Some 80 companies worldwide have been canvassed for bids on Blocks 5,6,7 south and west of Sihanoukville port and onshore Block 10, said MIME Under Secretary of State Nhep Bunchin

Bunchin said: "For the Ministry this is the right time to give the blocks away to tender. There has been a lot of interest. Some companies are interested in bidding for all four blocks, some three, others for just one."

The growing interest in Cambodia as a potential oil producer among exploration companies follows three oil and gas strikes out of four test wells drilled so far by three consortia already operating off the southwest coast.

"In the most successful fields, for every six or eight wells there are discoveries in perhaps one or two. But in the Cambodian situation it is very different, there have been three discoveries out of four. This is very exceptional," said Bunchin, adding: "The oil companies are looking at Cambodia and thinking this is a very good opportunity."

The latest strike, in Block 4 by the Premier Oil Camboya consortium, in particular has sparked interest in the adjoining Block 5, said Bunchin. He added that the new Investment Law, passed by the National Assembly in August, was also playing a part.

Bunchin was unable to give a closing date for bids to be made but said he thought bid winners would be announced within three months.

The rapid tendering process was because the Co-Premiers had ordered the Ministry to "move very fast in terms of investment," said Bunchin. "We are looking for capable and experienced companies," he added.

He also emphasized that it was too soon to say whether or when oil discoveries would lead to commercial production.

Block 5 has never been assigned to an oil company for exploration in the past while Block 6 was given to Technitrade BV and Blocks 7 and 10 to Marimex in production sharing agreements signed in 1992,

These agreements have now been revoked after the Dutch companies failed to make any move to explore their blocks and did not respond to fourth and final letters asking them why no work had been carried out.

Under oil sharing agreements a company or consortia undertakes to carry the cost of exploring an agreed area. The deal divides up any commercial discoveries between the government and the company. In the event of a discovery the government may pay back some of the company's exploration costs from its oil revenues.

Currently Premier and its partners are considering whether to carry out 2-d or the more expensive 3-d seismic surveys prior to drilling a second well.

Japanese consortium Campex is also in a planning phase and is to drill a third well. The third consortium currently operating off Cambodian shores, led by British-owned Enterprise Oil is now mid-way through a 3-d seismic survey.

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