SPEECH
Delivered by H.E. Mr. SOK AN,
Senior Minister,
Chairman of the Cambodian National Petroleum Authority
of the Royal Government of Cambodia
during
The Official Signing Ceremony of the Award of the Petroleum
Production Sharing Contract covering Block A, Offshore Cambodia
August 15th 2002, 15: 00 p.m
Office of the Council of Ministers, Phnom Penh
The Kingdom of Cambodia
Phnom Penh, August 15th, 2002
Distinguished Guests of Honour,
His Excellency Ambassadors, Charge d' Affairs and Counsellors,
Dear Mr. George Kirkland, President of ChevronTexaeo Overseas Petroleum,
Dear Mr. Takenosuke Yamasaki, President MOECO,
Excellencies, Ladies and Gentlemen,
First of all, on behalf of the Royal Government of Cambodia, the Cambodian National Petroleum Authority and on my own behalf, I would like to respectfully extend the warm greetings and best wishes to all distinguished guests of honour and participants who are attending this very important Official Signing Ceremony of the award of the Petroleum Production Sharing Agreement covering Block A, Offshore, Cambodia. This is a great momentum to promote the exploration, development and production of petroleum resources as well as to secure further international investment in Cambodia's oil and gas industry.
Today, I am very pleased with the award of this Petroleum Production Sharing Agreement for Block A, Offshore Cambodia to Chevron Overseas Petroleum (Cambodia) Limited and Moeco Cambodia Co., Ltd. (Moeco) Chevron Overseas Petroleum (Cambodia) Limited which was appointed as Operator for the PSC, received a 70 percent interest in Block A. The remaining 30 percent interest was awarded to Moeco which is a subsidiary of Mitsui Oil Exploration CO.LTD., ( MOECO ). Block A covers 6,278 square kilometres, is located in the offshore Cambodia, approximately 120 km far from the Cambodian mainland.
This Official Ceremony of Signing of the Production Sharing Contract for Block A, Offshore Cambodia heralds a new phase in Cambodia's Petroleum Industry in promptly carrying out petroleum operations with comprehensive work programs. The companies plan to drill a number of wells over the next 3 years. The drilling work program is expected to commence during the dry season later this year or early next year.
Kindly allow me to share with you a brief information of relevant issues:
Block A as parts of Block I, II, III, and IV has been awarded by the Royal Government of Cambodia to Chevron and Moeco, is located in Offshore Cambodia. Historically, it is a matter of record that Enterprise Oil Exploration and its partners signed a production sharing contract for Blocks I and II with the Royal Government of Cambodia in October 1991. Enterprise accumulated in excess of seismic, marine gravity and magnetic line data from May to July 1992 and interpreted during 1994.
The wells Angkor-1, Bayon-1, Preah Khan-1, and Da-1 were drilled by Enterprise in Blocks I and II during 1994 and 1996.
Block III was awarded to the Cambodian Petroleum Exploration Company Ltd. (CAMPEX) in December 1991. Seismic survey was carried out Block III during 1992 and 1993. The wells Apsara-1, Devada-1, and Poulo Wai-1 were drilled by Campex during 1993, 1994 and 1996.
Premier Oil Pacific Ltd. and its partners signed the agreement with the Royal Government of Cambodia for Block IV, Offshore Cambodia, in 1991. Premier acquitted seismic survey during 1992. The well Koah Tang-1 was drilled in 1994.
Idemitsu Cambodia Oil Exploration came into the Petroleum Agreements with the Royal Government of Cambodia for Blocks IU and IV by 1997. The well Koah Pring-1 was drilled in April 1998.
As a whole, nine wells were drilled between 1991 and 1998 and three discoveries were made-with these findings there contain varying amount of gas, condensates and light, waxy crude with low sulphur contents. Test flow rates were less than 5 million cubic feet per day and 225 barrels per day of oil and condensate. However, by the end of 1997, each of the original holders of the PSCs had relinquished their Blocks, at least in part due to collapsing of world oil prices.
The Official Signing of this Agreement allows ChevronTexaco and Moeco to conduct the following work programs:
(A) (i) Re-process selected parts of the existing 3D seismic data available from previous exploration within the Contract Area.
(ii) Drill two (2) exploration wells to an estimated depth of 2,500m or economic basement, whichever is reached first.
(B) After completing the work in (A), drilling four (4) appraisal or exploration wells and acquire 500 sq km of 3D seismic data unless Contractor notifies CNPA that it considers such additional work is not technically or economically justified, specifying its reasons for that views.
We hope that the exploration work programs conducted by Chevrontexaco and Moeco would convey to the successes in finding hydrocarbon in Offshore Cambodia, and would bring the economic benefit to the people of Cambodia as well as the companies. The CNPA sees the commercial discoveries and processing of oil and gas products within Cambodia as a vital step in accelerating the country's economic development. The development of a successful domestic oil and gas industry would benefit the country in a number of ways including:
· providing Cambodia with a significant, and hopefully cheaper, energy source for both industrial and domestic use;
· supplying “feed stock” to future petrochemical operations;
· generating revenue from the export of petroleum products;
· generating government revenue;
· providing the means for achieving the economic and social development objectives of the new Cambodian Government;
· providing employment opportunities for Cambodian citizens.
Cambodia's oil and gas industrial development strategy will address various elements both upstream and downstream activities: exploration, development and production as well as distribution, transportation, stock, refinery and trade in the longer-term. Now that our Cambodian National Petroleum Authority has been set up to provide direct orientation of global policy and strategy for the managerial and technical management control for the upstream and downstream. The complementary of sound policy climate and market-friendly strategy are one of the most encouraging lessons for the development of young oil industry in Cambodia.
As a conclusion, I would like to take this occasion to emphasize that the development of oil and gas industry in Cambodia has enormous potential for far-sighted investor.
I would like to express our congratulation and sincere admiration to the ChevronTexaeo and MOECO whose hard working staff have made their great efforts jointly with CNPA Staff in celebrating this very significant Official Signing Ceremony of this Award of the Petroleum Production Sharing Agreement.
Finally, on behalf of the Royal Government of Cambodia and on my own behalf, I would like to express once again my sincere thanks and warm regards and best wishes for Guests of Honour, Excellencies, Ladies and Gentlemen to have good health, fruitful and productive successes in their implementation of the above-mentioned Agreements as well as in your current businesses in Cambodia and over the world.
MANY THANKS FOR YOUR ATTENTION