Cambodia official: Expect Chevron to start development of Block A next year

9/26/2012

Cambodia official: Expect Chevron to start development of Block A next year

BY JACOB GRONHOLT PEDERSEN

PHOM PENH, Cambodia -- The government expects to be able to issue a license for offshore Block A to Chevron by the end of the year, the acting director-general of the Cambodian National Petroleum Authority said.

Chevron discovered commercial oil resources off the coast of the Cambodia in 2010, but is still in talks with the Cambodian government about the terms for developing the block.

Cambodia does not yet have all the relevant laws and regulations in place, Mr. Sok Khavan told Dow Jones Newswires in an interview. "We are very close to finalizing this discussion and hope to have an agreement by the end of the year, so that development can start in 2013."

Chevron, which has already drilled 18 wells at Block A, will develop the field under a production-sharing agreement.

"The government will likely receive the majority of revenue from the project, depending on factors including the price of oil and production and development costs, Mr. Sok Khavan said.

"From our analysis, the government's share should not go much below 70% and will be close to 80% in case of high oil prices," Mr. Khavan said. "The government is unlikely to conduct a big licensing round for oil and gas blocks. At the moment we are trying not to bite off more than we can chew."

Dow Jones Newswires

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