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Mining & Energy

China secures potential Cambodian crude oil


Cambodia Oil RefineryCambodia’s first oil refinery will break ground early next year and, once completed, will refine an estimated 5 million tons of oil per year.

Two state-enterprises signed an agreement on the USD2.3-billion refinery in Kampot province: Sinomach China Perfect Machinery Industry Corp. and the Cambodian Petrochemical Company, at the Council of Ministers in Phnom Penh.

Sinomach China Perfect Machinery is Chinese a state-owned firm with diverse businesses ranging from oil engineering to property,

“The plant will cost $2.3 billion and it will take a total of 36 months to build,” Zhang Sugang, General Manager of Sinomach, said at the ceremony, in the presence of Deputy Prime Minister Sok An, who is also chairman of the Cambodian National Petroleum Authority.

The Cambodian and Chinese state companies have secured an 8-hectare plot in Kampot province for the refinery outlets with the high- and-latest technology that has not been used in the Southeast Asian nations, close to the border with the Preah Sihanouk province. An exact plant location was not revealed.

Rising domestic oil demand

Cambodia’s oil demand at present is more than 1 million tons a year; It may soon reach up to 4 million tons a year due to the country’s growing economy

According to the figures recorded by the Ministry of Commerce, the country spent 1.33 billion US dollars to buy 1.35 million tons of oil from Vietnam, Thailand and Singapore in the first ten months of this year.

Built for future domestic oil extractions

Cambodia does not yet have any commercial exploitation of its offshore reserves; the refinery will meet the potential future Cambodian oil extractions.

The offshore area most advanced in terms of exploration, held by a consortium led by U.S. oil giant Chevron Corp. Chevron has drilled at least 18 test wells and spent more than $160 million on its search for exploitable reserves.

Chevron’s talks stalled

One day, the Cambodian government expects to earn about $200 million annually in oil and gas revenues; but Chevron has not yet settled the negotiations on tax payments to the Cambodian state.

High expectations

Experts also say that although the (Cambodian) Block A has oil, only a small proportion is actually recoverable and the cost to do so would be high.

Earlier this year, China National Offshore Oil Cooperation, which holds the license to the 7,000-square-meter Block F, began drilling its first test well off the coast of Preah Sihanouk and Koh Kong provinces.

The Thai company PTT has also started drilling in Block B, but has not announced any results, and Hong-Kong-based Mirach Energy is waiting for an environmental impact assessment before exploring in Block D.

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About Political Atheist

Living in South East Asia (Vietnam & Cambodia). At the ending/starting point of the more than 1000 year old SIlk Road.

Discussion

5 thoughts on “China secures potential Cambodian crude oil

  1. Reblogged this on Oyia Brown.

    Like

    Posted by OyiaBrown | December 30, 2012, 11:17 pm

Trackbacks/Pingbacks

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  2. Pingback: China secures potential Cambodian iron ore « China Daily Mail - January 3, 2013

  3. Pingback: China secures Cambodia’s Natural Resources oil and iron ore. « Living in Phnom Penh - January 4, 2013

  4. Pingback: China builds hydoelectric dams in Cambodia | China Daily Mail - February 24, 2013

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