Geol. Soc. Malaysia, Bulletin 32, November 1992; pp. 135 -154 An 'overview of the exploration history and hydrocarbon potential of Cambodia and Laos J.B. BLANCHE AND J.D. BLANCHE Blanche Oil and Gas Consultants Abstract: The petroleum geology and hydrocarbon potential of both Cambodia and Laos is virtually unknown with Laos being totally frontier, whilst Cambodia has had only three wells drilled. It is considered that the hydrocarbon potential of the Mesozoic and Cainozoic basins ofboth Laos and Cambodia, although frontier and high risk, is worthy offurther investigation by the industry. INTRODUCTION This paper sets out to review the history of exploration as well as the petroleum geology and hydrocarbon potential of both Laos and Cambodia in the light of the paucity of both published information and the lack of exploration data available. It is hoped that this paper will disseminate to the international oil industry the frontier nature ofexploration in these countries and provide a basis for further study. CAMBODIA Exploration History Cambodia, both on and offshore, remains essentially unexplored. Cambodia was one of the first countries to claim continental shelfjurisdiction both internally and at international level, when it passed domestic legislation in 1957, and ratified the Continental Shelf Agreement in 1960 (CCOP, 1976). During the summer of 1958, it was reported that a team of Communist Chinese geologists undertook geological mapping in Central Cambodia. These geological surveys were completed in January 1960. Shortly thereafter, the Royal Cambodian Government began negotiating with the Communist Block for the purchase of drilling equipment (Kaufmann, 1959, 1960). It is believed that Shell International also undertook reconnaissance field mapping. During the period 196~2, East European geologists, reportedly from Poland and the Soviet Union, undertook geological field mapping in western Cambodia. In 1965 the Royal Cambodian Government called for international bids for oil exploration, but none were received. In 1966 petroleum exploration was taken up again, within the framework of bilateral French-Cambodian co-oJ>eration, to undertake the compilation of geological maps of areas with petroleum potential. This was done under the direction of the French Bureau de Recherches Geologiques Paper presented at GSM Petroleum Geology Seminar 1991 136 J.B. BLANCHE & J.D. BLANCHE etMinieres and three areas were mapped by geologists ofthat organisation together with petroleum geologists from the Elf-Erap Societe, and Cambodian technicians. The first exploration phase began in 1970 when the Government granted rignts (under the Mining Law of 1968) to 80,000 km2 of shelf area to Elf du Cambodge. The terms of the concession called for a 50% relinquishment after 18 months with an initial exploration period of 5 years, with one extension phase of a further two years (Humphrey, 1971). Drilling was to commence within two years, with a minimum ofUS$5.5 million fmancial commitment to be expended during the initial5-year exploration period. Under the terms ofthis agreement, the Cambodian Government had a 20% option in the event of a commercial discovery being made. Profits were to be taxed at 50% and Royalties fully credited against taxes. Taxation and Royalties were based upon fully realised prices (Humphrey, 1970). A refinery at Sihanoukville and a State marketing company (Telakhmer) ensured a market for any discoveries. The French built refinery had an ultimate annual capacity of600,000 tonnes (4.5 million barrels) and had been operating since 1968 supplying the domestic market. During 1970 Elf acquired 2,880 linekm of seismic using CGG (Tanner and Kennett 1972). In 1970 the University ofLondon undertook a seismic refraction survey in the vicinity ofPoulo Panjang. This survey demonstrated the extension of the onshore Mesozoic basins to the offshore (Dash et al., 1970). During 1971 Elf drilled one wildcat well, the H-lX well, which reached a total depth of2,437 m (7,997 ft). The well was rumoured to have encountered oil and gas in its upper section (Fig. 1). • In October 1972, Elfrelinquished approximately 50% of its acreage (40,000 km2) and Esso acquired a 35% interest in the retained acreage (39,100 km2). The Government offered the relinqUished acreage together with several blocks in a licensing round to the industry at large, but there were few applications by the closing date of December 1972 (Kennett, 1973). Marine Associates (Hong Kong) Ltd. acquired a 17,000 km2 concession on the continental shelf in June 1973 on a block, part of which was originally held by Elf. The block outline is elongate, and forms a frame along the eastern, northern and northwestern boundaries of the Elf/Esso block.. Marine Associates acquired 1,992 km of seismic. Some 11,400 km2 (63%) of the Marine Associates concession lay in disputed areas (Fig. 1). In November 1973 Marine Associates farmed out 75% to Canadian Reserve Oil and Gas Ltd. of Calgary, and subsequently additional farmouts were made with the concession equities becoming: • Canadian Reserve '51.5% • Marine Associates 25.0% • Sunlight Oil 23.5% EXPLORATION HISTORY AND HYDROCARBON P<YI'ENTIAL OF CAMBODIA AND LAos 137 _._--_.\.-~ I I I I I I I I I I I I I , I \ I rt--··-I-_, I .. _ .. _ .. •i\ - \I .H-' ~:\ \ 01\- \ Open a{1 ~\ \ Area rl~\- \ o Paulo Paa Jang Gas Fields ~ \\\ \ \ , . ,, \\ , ®. \' ~ Key rmmmmmm Marine Associates _._.- Cambodia Boundary Claim _ •• _.. Vietnam Boundary Claim ---- Thailand Boundary Claim Figure 1: Cambodia - Cambodian Shelf Concessions 1975. 138 J.B. BLANCHE & J.D. BLANCHE Exploration activity in Cambodia was limited to one offshore seismic survey during 1973 when Elf/Esso completed a 2,159 km marine seismic survey (Bowman, 1974). In 1974 the ElflEsso consortium drilled the L-1 well (TD 1,714m) and the B-1-1 well (TD 1,983 m). Both wells were completed as tight holes, but were rumoured to be dry. During 1974 Canadian Reserve completed a 1,994 km seismic survey shot by Delta Exploration (Caldwell, 1975). As of2 October 1972, the Committee for Co-ordination ofJoint Prospecting for Mineral Resources in Asian Offshore Areas (CCOP) had conducted three surveys in the Republic, two of which related to petroleum viz CCOP.1JKHR.2 (seismic and sonic) and CCOP.1IKHR.3 (aeromagnetic). In addition, other surveys by Thailand and the Republic of Vietnam, CCOP and private companies related to the general framework of the Khmer Republic's portion of the Gulf of Thailand. Thus project CCOP.1JIZ.4 (1969) included approximately 200 line km of seismic and magnetic studies in Khmer waters in the Gulf of Thailand (CCOP, 1974). Following the fall of Phnom Penh to the Khmer Rouge in 1975, the agreement between the Elf-Erap Group and the Cambodian Government lapsed. Thus there has been no reported hydrocarbon activity owing to the unsettled political situation arising from the change in government. Shortly after the Vietnamese invasion and the deposing of the Khmer Rough regime, geological research resumed under the auspices of Vietnamese and Soviet geologists with a regional grid of seismic lines being acquired by the Vietnamese with Soviet help. Gas seepages were reported from the Permian limestones in the vicinity of Battambang and ~ong the Mekong river southwest of Kratie. At the present time, no oil and gas concessions have been awarded in Cambodia. The civil war has essentially precluded the onshore area from award, whilst the offshore area in the Gulf of Thailand (Pattani Trough) is located in a disputed zone between Vietnam and Thailand. Despite the difficulties, the Cambodian Government hopes to commence offshore exploration for hydrocarbons by involving international oil companies during 1991. It is expected that this exploration will be focussed in the Cambodian sector of the Gulf ofThailand in the acreage previously held by the ElfIEsso Group and Marine Associates. InJuly 1989, the Cambodian Government passed a Foreign Investment Law aimed at encouraging overseas investment in Cambodia. Currently Cambodia requires 300,000 tonnes of oil annually, with the Soviet Union providing 220,000 tones per year. It is interesting to note that Petrofina was awarded a seismic option contract covering 27,000 km2 in the northern half of the Malay basin in the disputed area claimed by Cambodia and Vietnam. The contract was signed on 9 August between Petrovietnam and Petrofina and is effective for 18 months (to March 1992) after EXPLORATION HISTORY AND HYDROCARBON POTENTIAL OF CAMBODIA AND LAos 139 which a Production Sharing Contract must be signed for an area no larger than ll,OOOkm2. Hydrocarbon Potential Mesozoic and Cainozoic basins have been identified both on and offshore (Fig. 2 and 3). Offshore The Khmer Shelf is located between the Malay Basin and the coast of Indochina, extending southwards as the Khorat-Natuna Swell. It comprises Palaeozoic igneous, metamorphic and sedimentary rocks unconformably overlain by Mesozoic continental sediments analogous to those of the Khorat Basin, with only a thin discontinuous Tertiary cover. This Mesozoic basin extends onshore (Sawamura and Laming, 1974) as the CardamomeJElephant Mountains. Three offshore basins can be recognised. These are, ~om west to east: i) the Pattani Trough of Thailand ii) the Tertiary Khmer Shelf iii) the Panjang basin The Panjang Mesozoic basin is located to the east of the Tertiary basin where Elf drilled their three exploration wells. These wells were located on the eastern flank of the productive gas and gas condensate producing Pattani Trough which is an extensional basin of Oligocene to Recent age. The Tertiary sediments thin towards the eastern flank of the Pattani Trough. PATTANI TROUGH The Pattani Trough is a rift basin and is elongate in a north-south direction. The basin thins to the east towards the Khmer Shelf. Itcontains up to 8 km ofalmost entirely non-marine fluvio-deltaic Tertiary to Quaternary sediments and has been established as a prolific gas and gas condensate producing basin (Lian and Bradley, 1986).