Cambodia is inching towards compromise with KrisEnergy on a production-sharing contract (PSC) for the long delayed Block A field in the offshore Khmer Basin.
Cambodian Energy Minister Meng Saktheara was quoted by the Khmer Times on August 11 as saying that sensitive matters such as profit sharing, technical hurdles and regulations had been settled.
Cambodia has no domestic hydrocarbon output, and Block A is years overdue since its original launch date because of Phnom Penh’s inability to reach agreement with investors.
The licence, which contains at least seven oil and gas deposits in shallow waters of 50-80 metres, was operated by Chevron until talks between the US super-major and the Cambodian government collapsed in 2014.
KrisEnergy now holds a 95% stake in Block A after buying out former investment partners MOECO and GS Energy, with Phnom Penh said to believe it would be easier to deal solely with the Singaporean firm. The CambodianEnergy Ministry owns the remaining 5% stake.
Despite the government’s struggles to make headway on the specifics, Wood Mackenzie, an energy consultancy, believes Cambodia’s PSC offer represents a more attractive deal than that available from other Southeast Asian producers.
KrisEnergy now hopes to bring Block A on stream by 2019-20, with an initial target output of 8,000 boepd. The block’s estimated 2P resources were estimated at around 10 million boe as of March 2012.
But the firm must also cover its own precarious financial position by luring outside investment to the project.
Estimates reported by Reuters in March suggested Block A would cost some US$200 million to develop, which is almost double KrisEnergy’s US$110.3 million capex budget for this year.
KrisEnergy was forced to seek a S$140 million (US$102.6 million) liquidity injection backed by Singaporeanshipyard Keppel in November 2016, and the firm faced a gearing ratio of 58.5% in June.
While the oil company has access to liquidity worth US$60.5 million, it must also settle US$118 million owed to the Development Bank of Singapore (DBS) by June 2018 unless a deferment on maturities can be agreed.
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