• 4 minutes Trump has changed into a World Leader
  • 7 minutes China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 8 minutes Indonesia Stands Up to China. Will Japan Help?
  • 10 minutes US Shale: Technology
  • 13 minutes Which emissions are worse?: Cows vs. Keystone Pipeline
  • 17 minutes Shale Oil Fiasco
  • 51 mins Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 9 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 16 mins Phase One trade deal, for China it is all about technology war
  • 2 hours Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 6 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 9 hours Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 4 hours Swedes Think Climate Policy Worst Waste of Taxpayers' Money in 2019
  • 8 hours Wind Turbine Blades Not Recyclable
  • 8 hours Might be Time for NG Producers to Find New Career
  • 8 hours Denmark gets 47% of its electricity from wind in 2019
  • 1 day Beijing Must Face Reality That Taiwan is Independent
Alt Text

Why U.S. LNG Can’t Win In Europe

Competition in EU gas markets…

Alt Text

Is Europe’s Latest Gas Deal A Win-Win?

The recent gas transit deal…

Oxford Business Group

Oxford Business Group

Oxford Business Group (OBG) is a global publishing, research and consultancy firm, which publishes economic intelligence on the markets of the Middle East, Africa, Asia…

More Info

Premium Content

Myanmar To Auction Off 31 New Oil And Gas Blocks

On August 30 the Ministry of Electricity and Energy (MoEE) announced it would be opening fresh rounds of bidding for oil and gas blocks in the first half of next year, and there are plans to launch a tender for at least one onshore block before the end of 2018.

If all goes according to plan, the MoEE’s Department of Oil and Gas Planning will offer 18 onshore and 13 offshore blocks.

The bids are aimed at revitalising Myanmar’s energy sector, which has seen activity slowdown in recent years. The last round of exploration and production (E&P) tenders were held under the former government in 2014.

However, of the 31 blocks the MoEE intends to offer, 16 have been awarded in previous tender rounds, and the winning bidders subsequently relinquished their exploration rights. Preliminary testing was conducted on some of the blocks that were handed back by former leaseholders, which may raise doubts over their commercial viability.

A lack of E&P opportunities in recent years, along with the departure of a number of international energy companies from the local market, has been a major contributor to declining foreign direct investment (FDI). In FY 2017/18 the total value of FDI fell from $6.65bn to $5.72bn, according to the Myanmar Investment Commission.

New discovery could fuel investment appetite in offshore fields

Nonetheless, recent finds in the upstream energy segment have brought new opportunities in the country’s offshore fields to the fore.

On September 22 France-headquartered multinational energy company Total reported encouraging results from preliminary testing at the offshore Shwe Yee Htun-2 field, located approximately 100 km north-east of Pathein township. Initial appraisal of the find indicates significant natural gas reserves of commercial viability. Related: What Killed The Oil Price Rally?

Further testing on the block will be carried out to determine the extent of the deposit, since gas was found in each of the five appraisal wells, officials said.

The Shwe Yee Htun-2 field is part of the larger A6 block that has estimated reserves of up to 3trn cu feet, according to a statement by Total.

Myanmar has 53 onshore and 51 offshore blocks that have been identified as having commercially extractable reserves, and activity is currently under way at 35 onshore and 38 offshore blocks.

Production-sharing contracts revised to attract international investors

Beyond offering new prospects in oil and gas, the government is also looking to lift the requirement that overseas investors partner with a local company.

“It will no longer be mandatory to join up with local firms,” Daw Khin Htay, director at the state-owned Myanma Oil and Gas Enterprise, said at a press conference in mid-July. “This will instead be made voluntary in the future.”

In the past, the authorities required that oil and gas projects be joint ventures. This was in part to ensure skills and technology transfer to the domestic energy sector, in order to better equip it for future growth. However, the requirement also diluted foreign investors’ holdings and revenue.

Potential leaseholders may also be encouraged by reports that the Department of Oil and Gas Planning is reviewing the terms of production-sharing contracts. According to consultancy Wood Mackenzie, some contracts mandate that the state receive up to 94% of all revenue generated from hydrocarbons projects, which is at the upper end of the international scale. Additionally, the government does not currently share the risk in exploration and development costs.

To this end, stakeholders have called for the government to reduce its share of revenue from oil and gas projects. Although this would lower state receipts from each project, the increased flexibility of energy contracts could help to increase the investment appeal of the new blocks and future offerings. However, this restructuring has yet to actually take place.

By Oxford Business Journal

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage




Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play