THE RECENT discovery of gas in Block A-6 is just the first of numerous discoveries in Myanmar, which remains an attractive frontier for international oil and gas companies despite a plunge in petroleum prices, energy officials say.
Than Minn, director for planning of Myanmar Oil and Gas Enterprise (MOGE), said the country had very great expectations for future gas discoveries even though exploration and production in deep-water blocks are very challenging indeed.
“The recent A-6 discovery has revealed the potential in Myanmar’s deep waters. So it will be on a first come, first served basis. Discoveries are waiting for brave explorers in our deep waters,” he said at Neoventure’s “Offshore Summit Myanmar 2016” on Tuesday.
Last week, locally owned MPRL E&P announced the discovery of gas in the Shwe Yee Htun-1 well in the Rakhine Basin, with help from international co-investors – Woodside Energy and Total E&P, which each hold 40 per cent in the project.
Than Minn urged international operators to explore more in deep-water blocks, saying that the exploration was expected to be a key engine in boosting the economy. MOGE itself is currently trying to develop hydrocarbon resources by utilising its capabilities and optimising efforts in 10 onshore blocks.
He said Myanmar itself experienced an increasing demand of gas.
“Natural gas is the best choice for fuel because of its availability. LNG [liquefied natural gas] offers a kind of security. Now many businesspeople are coming to Myanmar to introduce LNG business here.
“Myanmar is very new to the LNG business. And we started to find a solution [by using] LNG as a major source of gas. For that, we need master planning and feasibility studies. This is the first step for our energy business,” he said, adding that LNG would play a dominant role in both short and long terms until domestic gas production surges.
Shell, an Anglo-Dutch multinational oil and gas company, has signed a memorandum of understanding with the Myanmar government to build an LNG terminal in the Dawei Special Economic Zone for generating power for the industrial estate. The company recently commenced operations in Dawei SEZ.
At the event, Than Tun, former director of the Myanmar Energy Ministry and now adviser to MOGE, insisted that the outlook was bright despite lower energy prices.
“So far, there is no significant impact of decreasing oil prices on exploration. All the operators are carrying out their plans in accordance with the production sharing contract,” he said. The price of West Texas crude oil fell to just below US$30 a barrel in New York on Tuesday, the lowest intra-day price since December 2003.
The outlook is bright, Than Tun said, judging from the number of companies – 51 – seeking discussions with MOGE in the past few months. Most of them are from Asia, chiefly Singapore, Malaysia, Indonesia, Japan, and India. Besides Asian firms, Australian companies are also interested in doing business in the newly opened nation, he said.
Myanmar has a total of 51 offshore blocks. At present, exploration is carried out in 18 blocks. Additional 20 blocks were auctioned off and pre-exploration activities are underway. Winners of exploration rights must start drilling in shallow-water blocks by next year and in deep-water blocks by 2018.
Than Tun said that under the production sharing contracts, the winners are committed to carry out their exploration activities no matter what. Though open for negotiation on operation terms, Myanmar may blacklist those failing to honour their agreements.
The adviser said there was no plan yet for the next bidding round consisting of 13 offshore blocks.
The oil and gas sector has received the biggest portion of foreign direct investment into Myanmar.
Source: The Nation
