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Tuesday 22 September 2015

Oil and Gas Revenue Management Options for Cambodia

At a moderate rate of production, Cambodia’s oil and gas revenue could provide revenues of around $500 million a year for 20-25 years, and is estimated to peak in revenue at between $1.7 billion and $6 billion per annum for a small number of years. However, a recent drop in the value of oil and gas, which is forecast to continue into the foreseeable future, largely due to a number of large gas projects commencing production across the world, may have reduced the interest and profitability in developing Cambodia’s oil and gas reserves. This may have played a role in Chevron’s recent sale of their production rights, at a loss of approximately $100 million. Licenses for exploration and production of Cambodia’s oil and gas wealth are divided into blocks, as shown in figure 1, below. Block A is so far the most advanced in terms of exploration, while the sovereignty of a number of blocks, referred to as Overlapping Claims Areas (OCAs) is currently under dispute between Cambodia and Thailand(download).

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