SINGAPORE Aug 11 Singapore-based upstream oil and gas firm KrisEnergy Ltd said on Monday it has agreed a $65 million deal to buy out Chevron Corp's interest in an offshore oil block in Cambodia and take over as the block's operator.
KrisEnergy said in a statement it plans to acquire the entire issued share capital of Chevron Overseas Petroleum (Cambodia) Ltd, a subsidiary of the global oil company.
The deal is subject to regulatory approvals. Other partners in the joint venture, MOECO Cambodia Co. Ltd and GS Energy Corporation, have approved the transaction, KrisEnergy said.
Once the deal is completed, KrisEnergy will increase its stake in Cambodia Block A from 25 percent to 52.25 percent. The block is located in the Gulf of Thailand, where Chevron struck oil a decade ago - the first significant oil discovery in Cambodia's history.
But the launch of production has been delayed for years, as Chevron, the operator of the block, failed to reach an agreement with the government on a final investment decision.
KrisEnergy said it intends to work with the Cambodian authorities to agree the terms and conditions of the production licence before declaring a final investment decision.
The best estimate contingent resources, or potentially recoverable quantity of petroleum, attributable to KrisEnergy's enlarged stake in the project, will be about 5.4 million barrels of oil equivalent as of the end of 2013, KrisEnergy said.
KrisEnergy shares jumped 2.7 percent to S$0.75, the largest daily rise in over a month, but they have fallen more than 40 percent so far this year. (Reporting by Rujun Shen; Editing by Kenneth Maxwell)