PTTEP, CNOOC May Discuss Myanmar Gas Block Stake Swap

BEIJING, Jun 6, 2007 (Dow Jones Newswires)

Thailand's PTT Exploration & Production PCL (PTTEP.TH) will hold talks over the next 24 hours with China National Offshore Oil Corp. about closer business ties that could include swapping assets in Myanmar, PTTEP's top executive said Thursday.

PTTEP President Maroot Mrigadat said his company has been talking to state-run CNOCO for some time about possible ventures, adding that discussions have also been held with PetroChina Co. (PTR).

"(Myanmar) could be one of the possibilities," Maroot told Dow Jones Newswires in Beijing.

PTTEP, through its wholly owned unit PTTEP International Ltd., has a 100% stake in Block M-9 in the Gulf of Martaban. It recently announced drilling results in the block offshore Myanmar that showed commercial potential for natural gas output.

In addition, the company has a 100% interest in Blocks M-3, M-4, M-7 and M-11 in the Gulf of Martaban.

China's oil companies are building their presence in gas-rich Myanmar, despite mounting international criticism of the Southeast Asian country's human rights record.

Since October 2004, a consortium led by CNOOC's Myanmar unit, China Huanqiu Contracting and Engineering Corp. and Golden Aaron Pte. Ltd. of Singapore have been drilling under production-sharing contracts with Myanmar at onshore Block C-1 (Indaw-Yenan area), Block C-2 (Shwebo-Monywa area), Block M (Rakhine State), and offshore Block A-4 (offshore Rakhine State), Block M-2 (offshore Mottama) and Block M-10 (offshore Mottama).

China National Petroleum Corp., the parent company of PetroChina, is also targeting Myanmar and signed production sharing contracts with state-run Myanma Oil & Gas Enterprise to explore for oil and gas in three offshore blocks in January, according China's official Xinhua news agency earlier this year.

Asked whether PTTEP would consider swapping stakes in its Myanmar blocks for those controlled by the Chinese, Maroot said: "That would be the kind of deal."

Myanmar sits on top of some of the richest natural gas reserves in Asia. BP's Statistical Review of World Energy puts Myanmar's end-2005 proven gas reserves at 17.7 trillion cubic feet.

China's government has been negotiating with Myanmar over the past few years on a natural gas pipeline from Myanmar's western port of Sittwe to Kunming, the capital of Yunnan province.

The touted pipeline would not only help sate China's appetite for natural gas, but also help ease potential export choke points such as the Malacca Strait.

But so far nothing concrete on the pipeline plan has been reached.

Maroot is leading a delegation on a day-long visit to China that includes Suwit Pitrchart, executive vice-president of PTTEP's Business Development and International Division.

Copyright (c) 2007 Dow Jones & Company, Inc.

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