Elation, pride in Cambodia as its first drop of oil makes history


Prime Minister Hun Sen  breaking the good news to the nation

Prime Minister Hun Sen breaking the good news to the nation (PM’s Facebook page)

By Chhay Sophal
Thisiscn, Cambodia

PHNOM PENH: Waiting for years, Cambodia’s dream is becoming true on Tuesday and it is the Kingdom’s pride under Prime Minister Hun Sen’s government leadership.

The APSARA oil field in Block A can ease import petroleum products and it can make the Kingdom move toward stronger financial footing.

In 2020, the world, including Cambodia, is facing the deadly pandemic virus — COVID-19 – hurting businesses and economic status.

However, although 2021 is as unhappy as in previous years due to COVID-19, Cambodia has received a big gift for its nation, the first oil production as the new achievements for the country’s economy from the beginning of 2021 onwards.

In his live message to the nation on national TV and other private media outlets in the morning of December 29, 2020, Prime Minister Hun Sen expressed the nation’s pride with the first drop of oil.

“…. On behalf of the Royal Government of the Kingdom of Cambodia, I have great pleasure to inform all our compatriots about the start of Cambodia’s first oil production in Block A, Gulf of Cambodia, which has been waiting for a long time. Because of the efforts of the Royal Government and the active participation of Kris Energy, the operator of this project, we have so far achieved the successful completion of the construction, installation of the necessary equipment and facilities for the production process of our oil and gas resources,” Hun Sen said.

Cambodia’s first oil drop will start producing from the first A-0ID well of Platform A in the Gulf of Cambodia zone on December 29, 2020, coinciding with the 22nd anniversary of the end of the war – brought us national and territorial unity through win-win politics (December 29, 1998 – December 29, 2020). December 29, 1998 gives us all the properties to have the first oil drop in Cambodia on December 29, 2020.

Referring to the project, Hun Sen said to his compatriots that “the first oil agreement was signed in 2002 with Chevron Oversea Petroleum (Cambodia) Ltd., LG Caltex Oil Corporation, Moeco Cambodia Co., Ltd. and Kris Energy. The consortium was led by US-based Chevron. In 2010, Chevron announced the discovery of Cambodia’s first commercial oil field and designed a development and business plan for the Royal Government to review and finalize.”

cambodiaAccording to the plan, the first oil production was scheduled in December 2012. However, examining the economic divisions and legal constraints involved in the development and business plan proposed by Chevron at that time required the two sides to renegotiate some terms of the agreement to be consistent with the provisions of Cambodian law. Better equity in the distribution of economic benefits from this business plan, the implementation of the oil production plan in December 2012 was also hindered.

Negotiations for the oil agreement had also been intensified between the two parties (the government and the company) in terms of legal, technical and economic aspects. During this period of intense negotiations, Chevron Oversea Petroleum (Cambodia) Ltd., LG Caltex Oil Corporation and Moeco Cambodia Co., Ltd. requested to withdraw one after another in 2014 and 2016. Negotiations were extended for a long time from 2010 until August 23, 2017, when a new agreement with a new development and business plans were reached, paving the way for the construction and development of an oil well platform to get started.

For the major and main oil production infrastructure, they have been built, installed and completed in Block A for the production process. It includes construction of a production well on the Indonesian island of Batang began in December 2019 and was completed in August 2020. The platform arrived in Block A and was completed on September 7, 2020; and the oil production vessel was assembled, repaired and equipped in September 2020 in Singapore, and arrived in Block A on October 18, 2020. Oil tankers have been ready in Block A since November 9, 2020.

The first well was completed on December 23, 2020 and the first production will start on December 29, 2020. In addition, two other wells have already been drilled to the oil reservoir. The start of this oil production is a blessing for Cambodia.

“This is an important first step for Cambodia to build national capacity and the oil, gas and energy industries in the country,” Hun Sen said adding that the key benefits include national budget revenue, economic benefits derived from the creation of industrial diversification in the oil sector and national capacity building in this sector.

“The discovery and exploitation of oil and gas resources in Cambodia under the leadership of the Royal Government is a blessing for the people and the nation,” the Prime Minister said.

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