The government of Myanmar (Burma) has named Chevron, BG Group, Statoil, Woodside Energy, Shell, and ENI, among others, as selected candidates for its 2013 offshore licensing round.
The move follows the lifting of Western sanctions in 2012, after Myanmar ended 15 years of military rule in 2010.
About 30 production sharing contracts for offshore blocks were due to be awarded in the round. Candidates to operate 20 shallow and deep water blocks were announced, with ratification expected after detailed agreements were reached with the Government of the Republic of the Union of Myanmar’s Ministry of Energy, with more expected.
Those selected are:
- Shallow water
BG Group and Woodside Energy, block A-4; Chevron, block A-5; Woodside Energy and BG Group, block A-7; Oil India Limited and Mercator Petroleum, block M-4; ROC Oil Co. and Top Oil, block M-7; Berlanga Holding, block M-8; Transcontinental Group, block M-15; Reliance Industries, blacks M-17 and M-18; Oil India, Mercator Petroleum, and Oilmax Energy, block YEB.
- Deep water
BG Group and Woodside Energy, block AD-2; Ophir Energy, block AD-3; Woodside Energy and BG Group, block AD-5; Shell and MOECO, blocks AD-9, AD-11, and MD-5; Statoil and ConocoPhillips, block AD-10 (Bay of Bengal); ENI, blocks MD-2 and MD-4; Total, block YWB.
Image: Location of blocks on offer in the Myanmar Offshore Block First Bidding Round - 2013 (red shading). Source: PetroView®, Deloitte.
According to the US Energy Information Agency (EIA): "Burma (Myanmar) is an important natural gas producer within Southeast Asia, though its upstream hydrocarbons sector is underdeveloped. Sanctions, a lack of technical capacity, opaque regulatory policy, and insufficient investment by foreign firms have significantly impeded the country's efforts to realize its oil and gas production potential. However, many US and European Union sanctions were eased or suspended in 2012 in response to political and economic reforms in Burma."
The EIA said Myanmar currently produces a minimal amount of crude oil and condensates onshore.
Natural gas production has increased substantially over the past decade, rising from 61Bcf in 1999 to 420Bcf in 2011. The country's current natural gas output mostly comes from the offshore Yadana and Yetagun fields, but is forecasted to rise further.
Statoil said its deep water block AD-10, awarded in 50/50 partnership with ConocoPhillips, covers more than 9000sq km, about 200km offshore, in about 2000m water depth. The award represents a new country entry for Statoil, which now operates in 34 countries.
"We have been following the development in Myanmar closely since 2011," Erling Vågnes, senior vice president for Statoil’s exploration in the Eastern hemisphere said. "This is a large and virtually unexplored area in a basin with a proven petroleum system and thick sedimentary deposits. With this award, we have accessed at scale in another frontier acreage with significant upside, in line with our exploration strategy. This is a long-term opportunity with high subsurface risk, but with high-impact potential."
Statoil has committed to environmental and social impact studies and acquiring new 2D seismic during the first study period of 2.5 years. After this the partnership will decide whether or not to enter a three-year exploration period.
BG Group and its bidding partners have committed to a 3D seismic acquisition program in each block, which the firm said it expects to start in 2014/201515, with options for future drilling.
Read Total's history of oil and gas production in Burma: http://burma.total.com/myanmar-en/oil-and-gas-in-myanmar/oil-and-gas-in-myanmar-900130.html