Will Myanmar’s government cancel Woodside Petroleum Limited’s contracts?

Woodside Petroleum Limited’s (ASX: WPL) dealings with the brutal Myanmar government appear to be getting murkier.The energy company has been touting the prospective lucrative returns it hopes to gain from its investment in Myanmar.

“Woodside is one of the largest offshore petroleum acreage holders in Myanmar,” according to the company’s website

“Collectively, our nine permits across the Rakhine Basin make up approximately 56,600km².

“Our significant footprint in Myanmar represents an organic, high-value growth opportunity to meet increasing energy needs of an emerging region.”

The company has been hit by criticism from environmentalists and human rights activists for its ties with the Myanmar government, accused by the UN of subjecting “widespread fear and trauma” upon minority groups.

Now, Woodside’s dealings with the Myanmar government appear even more complicated after a confusing report in the Myanmar Times suggested the government is looking to cancel contracts with international energy companies.

“If they fail to honour their commitments going forward, the financial guarantees deposited at the Ministry of Electricity and Energy will be forfeited,” an anonymous source from the Ministry of Electricity and Energy reportedly told The Myanmar Times.

“If they want to drill, they will have to drill by next year and if they don’t drill, we will revoke the contract,” the source told the newspaper.

Woodside stated its “early-mover strategy in Myanmar delivers competitive advantage” but only time will tell.

Myanmar’s significant oil and gas potential has been well documented and so too have the risks of dealing with what is often perceived as an unstable and unpredictable government.

The price of oil has climbed recently but, like Myanmar’s government, what it will do next remains uncertain.

With the IMF projecting global economic growth of 3.7% for 2018, and amid reports of oil supplies tightening, it looks as though the price of oil will continue to climb.

That would come as good news to Woodside and its shareholders who have endured a turbulent year. The Woodside share price was trading at above $33 earlier this year and closed on Wednesday at $29.06.

The Beach Energy Ltd (ASX: BPT) share price has seen a better run of late, climbing from $0.55 in late June to close on Wednesday at $0.82.

And the Oil Search Limited (ASX: OSH) share price has surged since closing at $6.40 on August 18 to close on Wednesday at $7.11.

Still, there are better places to put your money than the oil and gas sector. Here are Our Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked.. But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of “The Motley Fool’s Top 3 Blue Chip Stocks for 2017.”

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Source: The Motley Fool

To see the original article click link here

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Puma Energy", “MOGE”, “yangon new town”,"MECTEL", "hydropower", etc.