Thursday, July 14, 2005

Chevron to assess Cambodia oil find

SIEM REAP, Cambodia (Reuters) — US major Chevron Corp. will assess the scope of its offshore Cambodia oil find early next year, raising hopes for the country’s first production by 2008, a senior government official said on Tuesday.

Chevron will drill six appraisal wells and four more exploration ones in early 2006 after discovering oil or gas in five of the six wells it drilled in Cambodia’s Gulf of Thailand over the last two years, said Ho Vechit, vice-chairman of the Cambodian National Petroleum Authority.

"If the findings are positive, oil production may commence as early as 2008," he told an industry conference.

The joint-venture exploring Cambodia’s Block A announced earlier this year it had found oil and was studying the economic viability of the find. The block is believed to be the impoverished country’s first significant oil discovery.

The find, called the Khmer Trough, may hold as much as 400 million barrels of crude and 3-5 trillion cubic feet of natural gas, a Cambodian energy official said last year.

Ho Vechit declined to comment on potential reserves. "We are very hopeful," he said.

An oil and gas find would bring vital revenues for the resource-poor Indochinese nation and should help lower electricity prices by providing a source of indigenous fuel.

Cambodia has also signed a number of new exploration agreements in an effort to join its neighbors, who have been pumping oil and gas from the Gulf of Thailand for years.

Block A, in which Chevron has a 55 percent stake, is the country’s only operating license. Japan’s Mitsui Oil Exploration Co. has a 30 percent share and LG-Caltex Oil Corp. has another 15 percent.

Block B, one of several other offshore areas being offered to foreign firms, is being pursued by US oil firm Unocal Corp. , Singapore Petroleum Co. Ltd. (SPC), Thailand’s PTT Exploration and Production PCL (PTTEP), and others, a second Cambodian official said.

Global oil major Chevron and China’s largest offshore oil producer, CNOOC Ltd. is competing to acquire Unocal, whose oil and gas assets are mainly in Asia.

Ho Vechit said the government was committed to finally resolving a long-standing sea-border dispute with Thailand over potentially oil-rich waters in the Gulf of Thailand, although he saw little chance of it happening this year.

"We are now looking at the technical aspects," he told Reuters, but declined to give a target for when talks might be finalised.

Cambodia and Thailand signed a memorandum of understanding (MOU) on resolving the overlapping claims area in 2001, but have yet to clear the way in a deal that envisages both a joint-development area and demarcated national boundaries.

Cambodia had earlier awarded exploration rights for the area to ConocoPhillips , Australia’s BHP Billiton and major Royal Dutch/Shell .

The disputed area may contain as much as 3 billion barrels of oil equivalent, a ConocoPhillips official said last year.

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