KrisEnergy finalizes oil agreement with

Singapore-listed KrisEnergy finalized yesterday the long-awaited production-sharing agreement with the Cambodian government, which paved the way for the company to develop the country’s first oil field. KrisEnergy has been the operator of Cambodia’s offshore Block A in the Gulf of Thailand since purchasing the stake of departing US energy giant Chevron in 2014. Under the terms of an agreement inked with Chevron in 2002, the government retains a 5% interest in Block A; however, yesterday’s agreement triggers a relinquishment phase by which 1,626 square kilometers, or about 25% of the concession, is returned to the government, leaving 3,083 square kilometers under the operatorship of KrisEnergy. The revised agreement allows KrisEnergy to develop Phase 1A and 1B on 197.6 square kilometers of the Apsara oil field, with the firm having to pay an income tax rate of 25% for the first five years on taxable income, and 30% thereafter. Additionally, the government has imposed an excess income tax, which, if conditions are met, would apply a progressive tax rate between 10 and 30% on what are deemed “windfall profits”. Royalty rates paid to the government remain unchanged at 12.5% of production, while the newly signed agreement adds an obligation for KrisEnergy to pay a 2% export tax on crude shipments. (Source: Phnom Penh Post)