Singapore-listed oil and gas company Mirach Energy announced yesterday that its Cambodian partner firm, CPHL Cambodia, has signed an agreement with two Chinese companies to start drilling operations for exploration in its offshore oil block.
The two Chinese companies, both subsidiaries of Shenzhen-listed Landocean Energy Services, will drill three exploratory wells in Block D, a statement read.
CPHL, which is 48 per cent owned by Mirach, owns 100 per cent of Block D, which has yet to produce any oil but was estimated to have 226.88 million barrels by Mirach in 2006.
The agreement will only apply if it is accepted by Cambodia’s General Department of Petroleum, while the Chinese firms – PST Service Corporation and Chengdu Western Union Petro Engineering Technology – will be compensated either through cash or shares.
Nevertheless, CPHL, which acquired 30 years of exclusive production rights for Block D in 2006, still has “a long way to go” before it begins extracting oil, said Meng Saktheara, secretary of state at the Ministry of Mines and Energy.
“No oil has been discovered so far, so they just keep searching at the moment,” Saktheara said, comparing Block D to the more popular Block A, where Singaporean firm KrisEnergy bought out Chevron’s stake last year.
“[At] Block A, they have already found oil,” he said.
Although Block A is more developed, KrisEnergy has yet to extract oil due in part to ongoing negotiations with the government over revenue sharing.
Saktheara said that even if oil was discovered in Block D, CPHL would have to go through several lengthy procedures before being able to tap into the oil below.
The chairman of both CPHL and Mirach Energy, William Chan, previously declared in 2010 that oil would begin flowing from Block D as early as 2012.
Mirach Energy did not return a request for comment on the issue.
There was no target exploration date given in the company’s announcement.