![\"\"](\"https:\/\/capitalcambodia.com\/wp-content\/uploads\/2019\/10\/Page-8-3.jpg\")
The company added that approximately 1,000 sq km was acquired over a large prospective area in the southwest portion of the concession area, which has been sparsely explored by old 2D seismic lines, to improve data quality over the prospective trend in the western section of Cambodia Block A.<\/p>\n
Cambodia Block A is located in the Khmer Basin in Cambodian waters in the Gulf of Thailand. A typical oil or gas field in the Gulf of Thailand has multiple fault blocks with hydrocarbons trapped in multiple reservoirs.<\/p>\n
KrisEnergy made a final investment decision (FID) to proceed with the first phase of development for the Apsara oil field, the first hydrocarbon development project in Cambodia in 2017 and since then has undergone many challenges to get to this current stage of awarding contracts to move equipment into place by end of this year at the earliest.<\/p>\n
Located in Cambodia Block A in the Gulf of Thailand, Phase 1A of the Apsara development envisages a single unmanned minimum facility 24-slot wellhead platform linked to a moored production barge capable of processing up to 30,000 barrels of fluid per day with gas, oil and water separation facilities on the vessel.<\/p>\n
Furthermore, according to KrisEnergy\u2019s statement, the oil will be sent via a 1.5km pipeline for storage to a permanently moored floating, storage and offloading vessel.<\/p>\n
KrisEnergy is the operator of Cambodia Block A and holds 95% working interest in it. The General Department of State Property and Non-Tax Revenue of the Ministry of Economy and Finance holds the remaining 5% on behalf of the Royal Government of Cambodia.<\/p>\n
The Cambodia Block A contract area covers 3,083 sq km over the Khmer Basin in the Gulf of Thailand where water depths range between 50 and 80 metres.<\/p>\n
The individual oil accumulations in Cambodia Block A are small in size and spread over a large geographic area, requiring significant funds and time to fully develop. Additionally, reservoir production performance in the Khmer Basin has yet to be proven.<\/p>\n
KrisEnergy said that, for these reasons, among others, there is some uncertainty regarding long-term production rates, reserves and commercial viability and therefore a phased development approach has been \u201cprudently\u201d adopted.<\/p>\n
Once the initial Phase 1A platform is on stream, there will be a period to monitor reservoir performance before starting Phase 1B, which envisages up to three additional platforms producing to the Phase 1A facilities. A Phase 1C will potentially add up to six additional platforms for the full 10-platform Apsara development.<\/p>\n
Despite its financial woes, KrisEnergy, in November 2018, awarded Keppel a contract for the modification and upgrading of a production barge for SJ Production Barge Ltd, a wholly-owned subsidiary of KrisEnergy.<\/p>\n
Keppel is currently constructing a S$30 million (about 22 million US dollars) production barge for KrisEnergy\u2019s Cambodia Block A with delivery set for the last quarter of 2019.<\/p>\n
Keppel Shipyard\u2019s scope of work on the production barge for KrisEnergy includes installation of a power generation module, electrical house, new accommodation units and other refurbishment works.<\/p>\n
When completed, the production barge will be capable of processing up to 30,000 barrels of fluid per day and is equipped with gas, oil and water separation facilities. It will be deployed in the Apsara oil field, which lies in Block A of the Khmer Basin in the Gulf of Thailand. The field is Cambodia\u2019s first hydrocarbon development.<\/p>\n
Capital Cambodia was informed that officials from the Cambodian petroleum authority have visited Keppel shipyard to see firsthand the progress on the modification works on the production barge and are preparing to present their case to the National Assembly in the coming weeks, most likely before the end of November.<\/p>\n
\u201cAt the National Assembly session, officials from the petroleum authority are expected to present full details on KrisEnergy and its commitment to indeed deliver Cambodia\u2019s first drop of crude by the first quarter of 2020 at the earliest.<\/p>\n
\u201cThe presentation at the legislature will also put to rest much speculation on the future of Cambodia\u2019s oil and gas extraction industry as well as misgivings or misconceived perceptions of what the first barrel of crude will actually look like,\u201d industry sources say.<\/p>\n
They added that this \u201cshock and awe\u201d session with a mock barrel is necessary as a lot is riding on KrisEnergy\u2019s ability to produce oil. This will decide the fate of Cambodia\u2019s hydrocarbon extractive industry, offshore within territorial waters as well as onshore.<\/p>\n
The Apsara area in the Khmer Basin will be the first geological trend out of a potential seven to be<\/p>\n
developed in Cambodia Block A. Given the Khmer Basin is a new petroleum source to be developed in the Gulf of Thailand, it is considered to be prudent to develop the oil accumulations in phases in order to gauge reserve performance, among other risks.<\/p>\n
The initial development, Phase 1A, consists of a single unmanned minimum facility 24-slot wellhead platform producing to a moored production barge capable of processing up to 30,000 barrels of fluid per day with gas, oil and water separation facilities on the barge. The oil will be sent via a 1.5km pipeline for storage to a permanently moored floating, storage and offloading (\u201cFSO\u201d) vessel where sales offloading will take place.<\/p>\n
Productivity and performance from Phase 1A will be monitored for an appropriate time period \u2013 up to six months \u2013 before the decision is taken to launch Phase 1B. Learning from early production will be leveraged for improvements in the later phases of development.<\/p>\n
Design changes would be made to improve the efficiency of future platforms based on production behaviour observed in previous development phases. Phase 1B envisaged three additional platforms producing to the Phase 1A facilities.<\/p>\n
A further potential stage, Phase 1C, adding six platforms will complete the full Apsara 10-platform development. The original FSO vessel will service all three development phases.<\/p>\n
There are a further six geological trends within Cambodia Block A where there is potential that oil and\/or gas may be trapped. These geological trends will provide future potential development opportunities for investigation and assessment.<\/p>\n
Previously, although the countdown had begun for production, uncertainty remained on KrisEnergy\u2019s\u00a0 actual start date because there were several big ticket items such as the sub-sea drilling system and floating offloading vessels which needed to be organised and which were in doubt, given the company\u2019s financial and liquidity woes.<\/p>\n
These items, which are not only big investments but which also\u00a0 needed considerable time to fabricate and mobilise, seem to have been resolved and contracts are being awarded or are in discussion.<\/p>\n
![\"\"](\"https:\/\/capitalcambodia.com\/wp-content\/uploads\/2019\/10\/Cover-1.jpg\")
<\/p>\n
Both KrisEnergy and the Government of Cambodia will derive revenues from the Block A project based on the sales price of Apsara crude oil when crude extraction starts, which is no longer in doubt.<\/p>\n
In marketing Apsara oil, KrisEnergy and the government\u00a0 have the objective of achieving the best possible sales price for the product. That sales price will be dependent on many factors including, among others, price levels in the global benchmark markets, the quality of Apsara crude oil and regional demand for crude oil and prevailing market conditions.<\/p>\n
The sale of Apsara crude domestically in Cambodia will be beneficial to KrisEnergy because it will not be subject to export tax. But domestic sales will depend on the timing of any refinery going into production; whether the facility is able to refine Apsara crude oil (this is related to the chemical properties of the crude oil and the resultant petroleum products required for distribution) and the market price the refining company is offering. Apsara crude oil sales will be undertaken on a competitive basis.<\/p>\n
However, industry sources cautioned that there is every likelihood of KrisEnergy scaling down their initial plans as stated earlier to be in line with its restructuring exercise as well as to be within its financial capacity, while hoping to snare a big player once the crude starts to flow.<\/p>\n
\u201cKrisEnergy is between a rock and a hard place because it is facing a crunch do or die mission in Cambodia, both literally and for the company\u2019s survival. Failure to produce crude as expected by the first quarter of 2020 could hamper the company\u2019s restricting plans and strategy, although Keppel of Singapore is a major stake holder.<\/p>\n
\u201cIt is not just KrisEnergy but Cambodia\u2019s entry into the oil production countries category which is at stake. Even though Cambodia may not see any immediate revenue because the industry practice is for suppliers to get back their returns from the initial crude production, the tag of \u2018oil producing country\u2019 will have a big impact on the gross domestic production growth of the company and its development plan as well as plans for electrification of the country.\u201d<\/p>\n
The officials concluded that extraction of crude, not discovery, is the key to unlocking the reserves in the overlapping claims area in the Gulf of Thailand as well as drawing in other players to embark on exploration works on the remaining oil concession blocks in the territorial waters of Cambodia.<\/p>\n
The company currently has 14 contract areas: in Bangladesh, Cambodia, Indonesia, Thailand and Vietnam and it is an operator for nine of those areas.<\/p>\n","protected":false},"excerpt":{"rendered":"
First production of fuel expected within just a few months<\/p>\n","protected":false},"author":3,"featured_media":2962,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":null,"_FSMCFIC_featured_image_hide":null,"footnotes":""},"categories":[23],"tags":[418,417],"yoast_head":"\n