NATIONAL PETROLEUM POLICY OF CAMBODIA · 2006-05-29 · 8. Petroleum Agreement (Art. 9) 1. Normally, no bidder shall be granted more than to Exploration Blocks for Petroleum Operations

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CCOP PETROLEUM POLICY AND MANAGEMENT (PPM) PROJECT

6th WORKSHOP OF THE CAMBODIA KHMER BASIN CASE STUDY

21-25 FEBRUARY 2006, SIEM REAP, CAMBODIA

NATIONAL PETROLEUM POLICY, AND PETROLEUM PROMOTIONS AND CONTRACT

PRESENTED BY

DR. MEN DEN

DIRECTOR OF THE PETROLEUM EXPLORATION AND OPERATION DIVISION OF CAMBODIAN NATIONAL PETROLEUM AUTHORITY OF

COUNCIL OF THE MINISTERS

NATIONAL PETROLEUM POLICY OF CAMBODIA

* The 1st National Petroleum Organization set up in 1970* In 1975 to 1979 and until 1986 no National Petroleum

Organization responsibility for petroleum exploration and production activities and issuing license to foreign Oil and Gascompany in Cambodia.

* The 2nd Petroleum National Organization set up in 1987 under the Geology and Mines Department of Ministry of Industry,Mines and Energy.

* In 1998 the Cambodian National Petroleum Authority (CNPA) was set up to responsibilities for petroleum resource and petroleum products have such as Divisions Exploration and Production, Downstream and Administration and Legal–Negotiation, and also in 1999 the E&P Division transferred CNPA.

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Mission and Vision of CNPA* The main objective of CNPA is to serve as an efficient

government working arm in implementing national energy policy for the country's best interests. CNPA’s fully integrated petroleum activities consist of exploration, production, logistics, transportation, refining, distribution, storage and other petroleum-related industries.

* The Cambodian National Petroleum Authority (CNPA) never celebrate the anniversary, but we believe that during Cambodia producing Oil or Natural Gas the CNPA will be celebrate the 1st anniversary of its operational achievements.

NATIONAL PETROLEUM POLICY OF CAMBODIA (CON’T)


* During 1970 – 1975, Cambodia Government was award disputed and undisputed areas to the Elf company to exploration petroleum resources in offshore Cambodia (Done 2D seismic and drilled 3 exploration wells).

* During 1991 – 1997, Cambodia Government was award block I and II to the Enterprise Oil company to exploration petroleum resource in offshore Cambodia (Done: 2D-3D seismic and drilled 4 exploration wells).

* During 1991 – 1997, Cambodia Government was award block III to the CAMPEX company to exploration petroleum resource in offshore Cambodia (Done: 2D seismic and drilled 3 exploration wells)

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* During 1991 – 1998, Cambodia Government was award block IV to the Premier Oil Pacific and Idemistu companies to exploration petroleum resource in offshore Cambodia (Done: 2D-3D seismic and drilled 4 exploration wells)

* During 1998 – 2000, Cambodia Government was award block V and VI to the Woodside Oil company to exploration petroleum resource in offshore Cambodia (Done: 2D seismic)

* During 1999 – 2001, Cambodia Government was agreed with Woodside Oil company to study on the petroleum resources in block I, II, III, IV offshore by re-processing and interpretation all data such as 2 D and 3D seismic etc,.


* During 2002, Cambodia Government was award block A to the Chevron Texaco company to exploration petroleum resource in offshore Cambodia (Done: same 3D seismic and drilled 5 exploration wells)


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CNPA’S Petroleum Policy

* Human Resources Development- Information Services- Technical Services, and- Policy and Regulatory Issueson the exploration and production, refining and petrochemicals, logistics and distribution.

* Development National Petroleum Resources and Petroleum Products.

* Reducing price (reasonable price) of petroleum products and electricity by using natural gas (LPG for CCGT).


Exploration & Production Division.

Downstream. Division.

Admin-Legal & Negotiation

Division

Chairman

Vice-Chairman

General Director


CNPA‘S ORGANIZATION CHART

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PETROLEUM PROMOTIONS AND CONTRACT

The Institution involved

* Cambodian National Petroleum Authority

* Ministry of Economy and Finance

* Council of the Ministers, and

* Other governor of provinces, during operate petroleum exploration and production.

Promotion Terms1. Invitation for Bid (Art.2)

By publish notice, in national and International newspaper

describing a time of at least sixty (60) days.2. Particulars to be mentioned in invitation for Bid (Art. 3)

(a) The exploration details blocks open for Petroleum

Operations.

(b) Basic information about the exploration blocks.

(c) Bidding fee.

(d) Other necessary particulars

PETROLEUM PROMOTIONS (CON’T)

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3. Particulars to be mentioned in Bid (Art. 4)(a) Evidence showing that the bidder is a company.(b) Name and address of the authorized to act on behalf of the bidder.(c) Evidence showing that the bidders commands capital, machinery, equipment, tools and specialists required for undertaking petroleum operations.

(d) Methods and time schedule of exploration operations.

(e) Minimum work program and budget for the exploration period (including two extensions).



(f) In the event that the bidder is to be joint venture of two or more persons, particulars pertaining to their relationship, responsibilities and percentage interests.

(g) Annual work program and budget for the first contract year.

4. Evaluation of Bid (Art. 5)

1. Upon receipt of Bids the CNPA shall evaluate them according to the following criteria:

(a) Financial competence of the bidder.

(b) Technical competence and professional experience of the bidder.

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(c) Experience minimum work and expenditure obligations during the Exploration Period.

(d) Proposed minimum work and expenditure obligations during the Exploration Period.

(e) Proposed allocation of Net Petroleum.(f) Proposed educational and training facilities.(g) Other facilities and benefits proposed(h) Any other relevant particulars.

2 In the course of evaluation of birds, the Ministry of Industry may ask for additional details or clarification on any matters from any bidder.


5. Negotiations (Art. 6)After evaluation of bids, the CNPA may undertake

negotiations with any qualified bidders.

6. Approval of Bids (Art. 7)

On the basis of its evaluation of bids and negotiations with bidders, the CNPA will forward the bids with its recommendations to the Cambodian Government for approval and the Cambodian Government ‘shall decide whether or not to sign any Petroleum Agreement.


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7. Notice for Signature of the Petroleum Agreement (Art.8)1 The Ministry of Industry shall inform any bidder

approved by the Cambodian Government pursuant to Article 7, and notify it of the date, time and place for signing the Petroleum Agreement.

2 In case a successful bidder without proper reason fails to appear for signing the Petroleum Agreement at the time mentioned in the notice sent under sub-article 8.1, the Cambodian Government may make alternative arrangements.


8. Petroleum Agreement (Art. 9)1. Normally, no bidder shall be granted more than to

Exploration Blocks for Petroleum Operations.2. A separate Petroleum Agreement shall be signed for each

Exploration Block.3. A Petroleum Agreement shall be signed in substantially

the form prescribed in Schedule 2 with such additions or deletions as may be approved by the Cambodian Government.

4. The CNPA shall sign Petroleum Agreement on behalf of the Cambodian Government.


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CONTRACT TERMS AND FISCAL REGIME OF PSA

1. Areas Not more than 2 blocks (A block 7,500sq.km²)2.Duration

Exploration 4yrs and two extensionsDevelopment 3 yrs for Oil and 4 yrs for Gas fields

Production 30 yrs and 5 yrs extension3. Work Obligation Exploration period

Initial Gravity & Magnetic, 2 D seismic, 2 - 3 WellsExtensions 3 D seismic and 2 – 5 wells explo-App.

4. RelinquishmentInitial 30%

80% - 90% based on negotiationNatural Gas70% – 80% based on negotiationOil

9. Cost recoveryNegotiation8. Depreciation

12.5% on the value of petroleum sold or disposed

7. Royalty (Art.21)

Negotiable6. Production bonus

Negotiable5. Bonus Signature25%Extension

CONTRACT TERMS AND FISCAL REGIME OF PSA (CON’T)

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25% – 50% from net income12. Income Tax (Art.21)

Based on negotiation15. State participant

Required to meet the internal demand of Cambodia

14. Domestic obligationEach license ringfencing13. Ringfencing

40% up to 60% based on negotiationGovernment11. Profit Gas split

40% up to 67% based on negotiationGovernment10. Profit Oil split



PSA FLOW DIAGRAM

Gross Revenue

Royalty

Cost Recovery(Operating costs, DD&A, IDCs etc)

Profit oil or gas Split

Income Tax(20% - 50%)

Contractor Take

Government Take

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Sihanouk Ville

Rong Samlem Island

Second Case Study Workshop

Geological Field Trip to Rong Sanlem Island28 August, 2003

THANK YOU VERY MUCH FOR YOUR KIND

ATTENTION

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Angkor Wat

Phnom Penh

Sihanoukville

Documents

NATIONAL PETROLEUM POLICY OF CAMBODIA · 2006-05-29 · 8. Petroleum Agreement (Art. 9) 1. Normally, no bidder shall be granted more than to Exploration Blocks for Petroleum Operations