PHNOM PENH, Cambodia, Sept. 27 (UPI) -- Cambodia aims to begin its first offshore oil production next year, a government official said.
"We would like to proceed quickly, on a fast-track basis," Sok Khavan, acting director general of the Cambodian National Petroleum Authority, was quoted as saying Wednesday at the Oil and Gas Investor Summit in Singapore by Platts news service.
Khavan was referring to oil exploration in Block A off the coast of Cambodia in the Gulf of Thailand, operated by Chevron Corp. with partners Mitsui, KrisEnergy and GS Caltex.
The development, covering 1.2 million acres, consists of a wellhead platform and a floating storage and offloading vessel, says a Chevron fact sheet.
So far Chevron has drilled 15 wells, says CNPA.
"This is the first development for Cambodia and the fact that we are new in this means we need to finalize (the contract) and make sure that our legal regime addresses all the issues," Khavan said. "We are now putting the final pieces in place and the discussion with Chevron and their partners are proceeding very well."
Chevron says it expects government approval and a final investment decision on the field by the end of this year.
"We continue to work with the government of Cambodia to obtain project approvals to achieve a final investment decision at the earliest possible date," a Chevron spokesman told The Wall Street Journal.
Khavan said it was difficult to estimate the potential production of Block A, because it is a new development and Chevron needs to pool several pocket discoveries together.
Under a production-sharing agreement, the Cambodian government will likely receive most of the revenue for the project, Khavan said, but percentages would vary depending on factors such as the price of oil and production and development costs.
"From our analysis, the government's share should not go much below 70 percent and will be close to 80 percent in case of high oil prices," he was quoted as saying by the Journal.
Separately, Cambodia and Thailand have yet to settle a maritime territorial dispute regarding 10,000 square miles that holds potential reserves of 12 trillion-14 trillion cubic feet of natural gas and an unspecified amount of oil, Khavan said.
"Only recently, the two governments have been optimistic that the issue can be resolved," Khavan said. "But the big issue is how revenues should be split."
Khavan said the country's gross domestic product, which stood at about $13 billion in 2011, is expected to increase five-fold by 2030. That growth has translated into an increase in oil demand of about 10 percent annually.
Cambodia relies on Singapore, Thailand and Vietnam for its oil imports.