<article><p>Chevron is exiting its problematic upstream operation in Cambodia, selling its stake in the block A development in the Gulf of Thailand to Singapore-listed independent KrisEnergy that will take over as operator.</p><p>The $65mn deal is still to be approved by Cambodian authorities, although fellow joint-venture partners Japanese trading house Mitsui and South Korea's GS Energy have already approved it. KrisEnergy already was an existing partner, but with the Cambodian state taking a 5pc stake the new operator will now have 52.25pc, Mitsui 28.5pc and GS 14.25pc.</p><p>Chevron made the Apsara oil find in 2005 but was unable to agree fiscal terms allowing the development to progress further. This mirrors nearly 20 years of negotiations between Cambodia and Thailand that have to failed to divide up their Overlapping Claims Area in the Gulf of Thailand, which is rich in gas. </p><p>KrisEnergy and its partners plan to work with the Cambodian government to agree on Apsara's terms and conditions before making any final investment decision. Phase one includes 24 development wells from a single platform with oil diverted to an offshore storage vessel before sale. Production from the initial single platform is expected to peak at around 10,000 b/d. Further development across the block could involve up to 44 production platforms in seven separate producing areas, KrisEnergy said. </p><p>Chevron made discoveries on four of its first six exploration wells in the Khmer basin during 2004-05. Phnom Penh optimistically targeted first production from block A by 2008 and estimated that one discovery held 400mn bl of crude and as much as 5 trillion ft³ (142bn m³) of gas.</p><p>The finds even spurred plans for Cambodia's first refinery, plans for which were announced in 2012 by Cambodian Petrochemical and China's state-owned Sinomach China Perfect Machinery Industry. The $2.3bn plant, scheduled for completion by the end of 2015, targeted capacity of 100,000 b/d, meaning much of its oil product output would be exported until domestic demand caught up.</p><p>Chevron's finds spurred more investment interest in Cambodia, with companies such as China's state-controlled producer CNOOC given exploration rights. But drilling results during the past few years have been disappointing, leading some operators to relinquish blocks and others to defer investment.</p><p>rjd/kaf</p><p> Send comments to <a href="mailto:feedback@argusmedia.com" target="_parent"> feedback@argusmedia.com </a></p><br><br><p> If you would like to review other ArgusMedia.com content options, <u><a href="http://info.argusmedia.com/mailers/News/sectortrial.html?ref=webnews" target="_TOP"> request more information </a></u> about Argus' energy news, data and analysis services. </p><p><i> Copyright © 2014 Argus Media Ltd - <a href="http://www.argusmedia.com/" target="_TOP"> www.ArgusMedia.com </a> - All rights reserved. </i></p></article>
