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Myanmar invites bids for 30 offshore oil, gas blocks

Companies that win licences will operate on a production-sharing basis; foreign firms will be able to operate alone in the deep-sea blocks
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First Published: Thu, Apr 11 2013. 07 02 PM IST
A file photo of oil tanks at a site operated by China National Petroleum Coporation at an offshore block of Madae Island near the town of Kyauk Phyu of Rakhine State, western Myanmar. Photo: AFP
A file photo of oil tanks at a site operated by China National Petroleum Coporation at an offshore block of Madae Island near the town of Kyauk Phyu of Rakhine State, western Myanmar. Photo: AFP
Yangon: Myanmar said it would open bidding in June for the exploration and development of 11 shallow and 19 deep-sea oil and gas blocks, in only the second bidding round since the easing of US sanctions against the gas-rich country.
“Interested parties are to submit their letters of interest to the director general at the Naypyitaw-based ministry of energy by June 14,” the ministry said in an announcement on its website and in official newspapers on Thursday.
Stiff competition is expected for the 30 offshore blocks. The bidding round would be the third opportunity for companies to enter the country’s oil and gas sector since 2011 and the second round since US sanctions were eased due to democratic reforms in the Southeast Asian nation.
Myanmar, a country of 60 million people, is rich in gas reserves, which government officials estimate at 11 trillion to 23 trillion cubic feet.
The announcement dated 11 April said “the potential bidders will be allowed to submit three proposals for any three offshore blocks (shallow water or deep water or both)”.
Companies that win licences will operate on a production-sharing basis. Those who win the 11 shallow blocks will have to work with at least one registered local partner, the ministry said.
Foreign companies will be able to operate alone in the deep-sea blocks, given that few local companies have any experience in the sector.
Onshore blocks
In January, the ministry invited bids for exploration licences for 18 onshore blocks. Foreign companies were required to have local partners, and as a result about 137 local entities rushed to register with the ministry.
Also on Thursday Myanmar announced the names of 59 companies that had pre-qualified for the 18 onshore blocks from countries including Canada, the UK, Australia, Japan, Thailand, US firms Esso Exploration International and Osprey Petroleum Co, and one Chinese company.
Myanmar’s MPRL E&P Pte. was the only local company among the 59 that qualified.
“Since the potential bidders for these 18 blocks are required to enter mandatory joint-ventures with a registered Myanmar national company, they didn’t appeal to international giants such as Royal Dutch Shell PLC, Chevron Corp , ConocoPhillips and Exxon Mobil Corp,” a senior energy ministry official said.
Myanmar exported gas worth $3.5 billion, mainly to neighbouring Thailand, in fiscal year April 2011 to March 2012, up from $2.52 billion in gas the year before.
According to Chinese state media, gas from off Rakhine State in western Myanmar should begin to flow through a pipeline to China in May. A parallel oil pipeline is expected to begin operations in 2014.
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First Published: Thu, Apr 11 2013. 07 02 PM IST
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