Chevron's Plan to Develop Cambodia's Offshore Block A Delayed by Tax Talks

Chevron Corp.'s plans to develop Cambodia's offshore Block A in the Gulf of Thailand has been delayed due to an impasse in negotiations on taxation, a senior Cambodian government official said, according to local media The Phnom Penh Post Wednesday.

Negotiations between Chevron and the government over taxation have stalled, according to the secretary of state at Cambodia's Ministry of Mines and Energy Meng Saktheara, who added that while a resolution would be found soon it could take “three to five years” for the country to see its first drop of oil.

“So far, the government has not yet responded to the application [from Chevron] due to the issue of taxation,” Saktheara said, pointing to disagreements over how much of Chevron’s share of the profits should go towards state coffers.

“We want to make sure that all Cambodian people benefit from this development,” Saktheara commented.

Chevron indicated on its website that a final investment decision for Block A is expected after an agreement on commercial terms and government approval of production permit are in place.

The firm's unit Chevron Overseas Petroleum (Cambodia) Limited has a 30 percent operating interest in Block A, an area covering 1.2 million acres (4,709 square kilometers) in the Gulf of Thailand.

Chevron's development plan for the block consists of a wellhead platform and a floating storage and offloading vessel.



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