Myanmar Sees Increased Offshore Exploration Work in Late 2015/Early 2016
Myanmar, one of the few frontier areas for petroleum exploration in Southeast Asia, expected to see a rise in exploratory activities by local and international oil and gas companies -- who have been granted onshore and offsore blocks earlier -- in late 2015 and early 2016, local media Eleven reported.
“The [Myanmar] government gave the green light for 16 onshore blocks and 20 offshore blocks during the last financial year. Oil and gas exploration will start in late 2015 and early 2016," Dr. Aung Kyaw Htoo, managing director of Dare Co Ltd., a local construction, engineering and services firm said, as quoted by Eleven.
The prospect of an increase in exploration activities in Myanmar over the next few years has been well received by local firms.
"Myanmar companies have many opportunities beyond 2015. It is heartening to see the involvement of big oil companies like Shell and Chevron in the projects. There will be many job opportunities in the country,” Aung added.
Australia-based oil and gas company Woodside Petroleum Ltd. revealed last week in its second quarterly report that it planning is ongoing to acquire extensive 2D and 3D seismic data over shallow-water Blocks A-4 and A-7 as well as deepwater Blocks AD-2 and AD-5. These four blocks were awarded by the government to Woodside and its joint venture under Myanmar's Bidding Round - 2013 in late 2015 and early 2016. Meanwhile, Woodside said preparations are underway for the drilling of the Saung-11 well in Block A-6 in late 2015 and the Tha Lim-11 well in Block AD-7 in first quarter 2016 offshore Myanmar.
Earlier, UK-based Ophir Energy, which partners Myanmar's Parami Energy, indicated July 6 that the firm has recently completed the acquisition of 4,170 square miles (10,800 square kilometers) of 3D seismic data at deepwater Block AD-3 in the Rakhine basin.
“Many foreign companies have won the tender for oil blocks under the current government ... companies like Shell and Chevron ... will start exploration in late 2015 and continue for three or four years,” Kyaw Kyaw Hlaing, chairman of Myanmar's Smart Group of Companies, said, as reported by Eleven.
According to Myanmar's Directorate of Investment and Company Administration (DICA), the country collected nearly $20 billion in total foreign investment in the oil and gas sector by the end of first half 2015.
Under the Ministry of Energy’s bidding rules, international oil and gas companies have to form joint ventures with Myanmar firms in the development of onshore and offshore blocks and the inclusion of domestic firms amounts to an estimated 5 percent.
“Only a handful of Myanmar companies are involved in this sector. Our general services are about 5 percent. It amounts to 5 percent of the total value (of $20 billion in foreign oil and gas investment). We need to make efforts to have a greater stake in this sector. We have many experts who worked on drilling with the Myanma Oil and Gas Enterprise(MOGE). Our content is less than 10 percent. Roughly, it is about 3-4 percent. Domestic contractors know this and need to seek ways of extending their work and services," DARE's Aung said, according to Eleven.
"We need more legislation. A 25 percent ratio would be fairer. Official supervision is weak. Work that domestic companies could do is shifted to overseas companies. We face difficulties despite making efforts. The government should pass laws and directives,” he added.
According to the Ministry of Energy, Myanmar has 104 oil and gas blocks, comprising 53 onshore and 51 offshore blocks.
At present, only 16 onshore and 19 offshore blocks have been developed. The country produced about 8,000 barrels of oil per day and 55 million cubic feet per day (MMcf/d) of natural gas from onshore fields, while the offshore fields supply around 7,000 barrels of condensate daily and about 2 billion cubic feet of gas per day of natural gas, The Myanmar Times citing information from a geologist at the Ministry of Energy, reported in early May.
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