Singapore-listed KrisEnergy has reached a loan deal with Kepinvest Singapore to assist the company with bringing the Apsara project off Cambodia online on schedule.
KrisEnergy said the loan would also remove the risk of losing the licence. The Apsara project is located in Cambodia’s offshore Block A.
The loan was split into two – Facility A of up to $30 million and Facility B up to $57 million. The use of Facility B was subject to lender’s approval.
KrisEnergy, which last month completed construction of the Apsara wellhead platform, Cambodia’s first offshore oil platform, said Kepinvest agreed to an initial utilisation of Facility B.
According to the company, Facility A has been fully drawn down and around $10.8 million has been drawn down on Facility B.
In the statement, KrisEnergy stated the Cambodian government indicated there would be “serious consequences, financial or otherwise”, if the first oil deadline was not met.
If first oil is not achieved by Dec 31, such consequences could include the termination of the concession rights for Block A.
“Kepinvest Singapore is providing funding for Facility B to maintain the current development schedule for first oil and avoid any adverse consequences associated with not achieving first oil production by 31 December 2020”, the company added in a statement.
KrisEnergy sees Block A as a key asset and is “expected to materially increase the group’s revenue and cash flow once oil production commences”.
Also, it expects Block A to be the highest revenue-generating asset in the company after it is developed and is a key asset for the restructuring of the firm.
KrisEnergy also extended the completion date of its debt restructuring. Namely, Kepinvest agreed to move the date from Sept 30 to Nov 30.
The Mini Phase 1A Apsara development off Cambodia, which is the first phase of potentially several phases, is expected to reach a peak rate of 7,500 barrels of oil per day when online.
The first phase will test reservoir performance and the long-term potential of the field. If successful, the installation of more facilities for increased production will be implemented.
KrisEnergy has been fending off creditors on multiple fronts as the upstream oil company fights to keep its Cambodian ambitions on track Its debt load stood at $476.8 million in 2019.
Despite financial pressures, KrisEnergy said it will “continue to focus all operational resources into the Apsara development”.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.