The future of Cambodia’s nascent petroleum sector has been dealt a blow after a disappointing start to production at the country’s first oil project.
Cambodia’s Ministry of Mines and Energy has demanded an explanation from Singapore-listed KrisEnergy for the lower than expected flow from the offshore concession, known as the Apsara oil field, the Khmer Times reported on Monday.
Cheap Sour, director general of the ministry’s General Department of Petroleum, told the newspaper the company, which acquired the rights to the site in 2014 from Chevron, could face a fine or, potentially, the termination of its agreement.
The warning compounds problems for KrisEnergy, which in December celebrated pumping Cambodia’s first drops of oil.
In a March 31 update, KrisEnergy revealed the slow start to the project threatened ongoing efforts to restructure its heavy debt load and could ultimately imperil the firm’s future.
Average production between February 23 and March 30 was 2,883 barrels of oil per day – far short of the forecast peak production of 7,500 bopd.
“Given the significantly lower estimated ultimate recovery and cashflow from the Apsara Mini Phase 1A development, material uncertainty exists over the Group’s ability to complete the Restructuring Exercise and to continue as a going concern,” the company told shareholders.