PHNOM PENH (BLOOMBERG) - Cambodia has begun extracting its first crude oil from fields in the Gulf of Thailand, in a venture between Singapore's KrisEnergy and the government, both parties said on Tuesday (Dec 29), bringing an end to years of delays.
Prime Minister Hun Sen announced the news on social media while KrisEnergy said the concession started production on Monday and would progress in phases once new wells were commissioned and completed.
"I... am pleased to inform all Cambodians about the start of Cambodia's first oil production in the long-awaited Block A," Mr Hun Sen said on his Facebook page.
Kelvin Tang, chief executive of KrisEnergy's Cambodian operations, called the event "an important strategic milestone" for the company.
"There has been a steep learning curve for all involved," Mr Tang added in a statement.
Cambodia and Singapore-listed KrisEnergy signed a pact in 2017 to develop 3,083 square kilometres of the Khmer basin in the Gulf of Thailand known as Block A.
Cambodia has struggled to develop its oil fields as few companies were willing to invest in the area following a global oil price slump in 2014.
Singapore-listed KrisEnergy, which has been a partner in the project for more than a decade, bought out Chevron Corp's operating interest in Block A in 2014 for US$65 million.
Chevron had found oil in the block in 2004 but failed to strike a development agreement with Cambodia, which has a 5 per cent stake in the venture with KrisEnergy.
Earlier, KrisEnergy had anticipated oil production from the Aspara field to start some time last year.
On Tuesday it said development of that field would proceed in phases, allowing time to mitigate risks as well as collect and assess data, since the production performance of the basin is unproven.
KrisEnergy shares have been suspended since August last year as the company explored restructuring options.