Cambodia’s first oil field is estimated to produce only a “small fraction” of expected oil, according to an independent review, putting its developer, KrisEnergy, in further financial peril, the company said.
KrisEnergy’s “Apsara” offshore oil field was finally brought online in December to much fanfare after years of delays. Prime Minister Hun Sen at the time asked Defense Minister Tea Banh to bring the first drops of oil to Phnom Penh to keep at the Win-Win Monument on the capital’s outskirts, and touted the project as “a blessing for the Cambodian people.”
However, KrisEnergy warned in March that it was getting less oil from the wells than expected, and on Wednesday issued an announcement disclosing the results of an independent technical review.
“Estimated ultimate recovery from the five development wells is likely to be a small fraction
of the pre-development estimates primarily due to significantly lower volume of
hydrocarbon-in-place connected to the wells and the geological complexity resulting in
smaller oil accumulations,” third-party petroleum engineering consultant Netherland, Sewell & Associates concluded.
KrisEnergy previously said it was extracting around 2,883 barrels of oil a day, despite earlier predicting production of 7,500 barrels a day.
“While the Company is evaluating whether there are any reasonable remedial actions to undertake in order to try and improve production rates, such remedial action has limited potential to increase well productivity (if at all) and is not expected to materially improve total oil recovery due to the fixed configuration of the subsurface reservoirs,” the company said in its Wednesday announcement.
KrisEnergy has faced significant debt issues amid the beleaguered development of the Apsara oil field, a project decades in the works. It was formerly controlled by the U.S.’s Chevron.
“[T]he disappointing recovery expected from Apsara production will significantly reduce revenues generated from the development and therefore further deteriorate the Company’s financial condition,” KrisEnergy said.
The company said in March that “material uncertainty exists over the Group’s ability to complete the Restructuring Exercise and to continue as a going concern.”
Energy Ministry petroleum department director Cheap Sour did not immediately reply to questions.