Meng Saktheara, a secretary of state at the Ministry for Mines and Energy, told the news service that “[t]here will be an agreement signed in March.”
Block A is located in the Khmer basin in the Cambodian sector of the Gulf of Thailand and contains the Apsara oil field, said to be the country’s only confirmed discovery. KrisEnergy now holds 95% of the block with the remaining 5% transferred to the Cambodian Ministry of Mines and Energy.
Authorities had approved the transfer of 28% and 14.25%, from Mitsui Oil Exploration Co. Ltd. and GS Energy Corp., respectively, to KrisEnergy in October 2016.
A November 2016 report from The Phnom Penh Post said Saktheara believed that the new ownership structure will allow the development to move forward, as a “stalemate” had developed between the previous three partners.
“The big news is that KrisEnergy now has the whole block and the other companies that got in the way are no longer there,” Sakthear told the Post. “This allows them to move forward with the project, but all the responsibility now rests on their shoulders.”
Cambodia’s hope is that the field could finally bring its first oil after many years of delay.
Reuters reports that the country has struggled to develop oil fields in the Gulf of Thailand, with few companies willing to invest in the area since the oil price crisis.
However, in KrisEnergy’s 2016 results, Jeffrey S. MacDonald, executive director and interim CEO, named the country as an area of particular interest in its new business plan.
“Pursuant to the new business plan, we intend to increase our operational focus on development and production activities in the Gulf of Thailand, including Cambodia. The Gulf of Thailand is an area of particular expertise for the group and we operate three concessions containing near-term oil developments, thereby giving us control in terms of timing, development concept, and allocation of capital.
“Specifically, we intend to concentrate on the further development of the G10/48 Wassana oil field, and development of G6/48 and Cambodia block A oil fields, all of which are operated by KrisEnergy, and all of which have multiple low-risk development opportunities with significant exploration upside. These developments will be core to our strategy in order to generate free cash flow from operations and provide for the repayment of our debt obligations beginning in 2022,” it said in the report.
The company continued by noting that it would consider selling stake in Cambodia block A and the G10/48 Wassana field in Thailand to generate free cash flow and allow for repayment of debt obligations in 2022. The company posted a net loss after tax of more than $237 million for the 2016 fiscal year, over $48.7 million in 2015. This was despite the fact that the company’s revenue more than doubled year-over-year, from $60.2 million in 2015 to $140.2 million in 2016. It also proposed a restructuring plan in November 2016.
KrisEnergy acquired the block A operatorship when it bought Chevron Overseas Cambodia Ltd.’s 30% stake. It originally farmed into the block in 2010.