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Cambodia Petroleum Exploration Co., Ltd. (CAMPEX) drilled its third exploratory well named “Poulo Wai-1” in August 1996 in the Block III of Offshore Cambodia. In order to select a drilling rig, CAMPEX studied the two contract systems: an Assignment/Reassignment Agreement system (“Assignment”) and a Tender system. It was concluded that “Assignment” was more cost effective than a Tender on this particular well after a series of negotiation with Enterprise Oil Exploration Ltd. (Enterprise). CAMPEX decided to adopt “Assignment” and acquired a drill ship. The main points of the agreement were that CAMPEX was assigned the right and the duty of one option well from the original agreement made by Enterprise and that CAMPEX shared a mobilisation and a demobilisation cost of the rig, a rig modification cost and a time-writing cost with Enterprise. For the sake of the adoption of “Assignment”, CAMPEX saved the total well cost significantly.

The assignment/reassignment agreement for the offshore drilling rig acquisition: A case history in the Kingdom of Cambodia.