Cambodia is expected to earn “more than $25 million”, equivalent to 70 per cent of the nearly 300,000 barrels of crude oil stolen by the Bahamas-flagged tanker MT Strovolos last year, after long-running discussions come to an expected close at end-September, according to a senior energy official.
Ministry of Mines and Energy secretary of state Meng Saktheara told a press conference on August 9 that after several rounds of negotiations, the concerned parties have agreed in-principle that Cambodia would receive 70 per cent of the oil, the shipping company 26 per cent, and KrisEnergy’s creditors four per cent.
The Singapore-based KrisEnergy Group in 2014 bought a controlling stake in the offshore Block A concession from US oil giant Chevron for $65 million, and in 2017 entered into a petroleum agreement for exploration and development from the government. However, just 157 days after it extracted Cambodia’s first drops of oil, KrisEnergy Ltd filed for liquidation on June 4, 2021, confirming that it was unable to pay its debts.
Later that month, the MT Strovolos, while being leased by KrisEnergy, left Cambodian waters without obtaining customs clearance or the required permission from the authorities. Indonesian authorities seized the tanker and its crew over a month later, and confirmed that 297,686.518 barrels (nearly 47.33 million litres) of oil were onboard.
Saktheara said the shipowners, KrisEnergy creditors, oil buyers and other stakeholders at an August 8 meeting had “agreed on major principles, and we expect a detailed agreement to be signed soon, after a request is made for a consensus from the upper echelon of government on the outcome of these negotiations”.
He said that if the top government officials agree on the outcomes of the talks, a prompt resolution can be reached and the oil can start being sold, “to serve the interests of the nation”.
The official disclosed that, earlier in the talks, Cambodia’s share of the oil had been lower, adding that the Kingdom would keep “the $5 million deposit that we have seized” and profit from the higher prices of oil which “have risen from $50 to more than $90 per barrel”.
Of note, assuming that Cambodia receives precisely a 70 per cent share of the oil – given the amount confirmed by the Indonesian authorities – the Kingdom would need to sell the crude at an average of no less than $119.98 to reach Saktheara’s expectation of “more than $25 million”.
Saktheara said the MT Strovolos had now returned to Thai waters from Bangladesh, and that the ministry is relying on independent agencies to inspect the vessel, which they say is “as good as ever”.
KrisEnergy pumped a total of nearly 300,000 barrels from Cambodian waters, leaving almost 200,000 barrels’ worth in the five wells drilled by the company.
A team at the energy ministry and Canadian-owned company EnerCam Resources Co Ltd (EnerCam) are looking into picking up where KrisEnergy left off and studying the possibility of investing in oil extraction from Block A, using equipment seized by the ministry.
The energy ministry is also in preliminary talks with the Ministry of Economy and Finance on the feasibility of setting up a national oil company, so that the sector is no longer solely dependent on international companies.