BackOVL wins two blocks in Myanmar rounds
The state-owned firm won two onshore blocks of the 18 that were bid out by the Myanmar govt exploration
Premium(Reuters)
New Delhi: State-owned ONGC Videsh Ltd (OVL) has won two onshore blocks of the 18 that were bid out by the Myanmar government for exploration.
Myanmar had received 75 expressions of interest for these 18 blocks and short-listed 59 companies for final bids. A total of 31 foreign companies are working in Myanmar along with state-owned Myanma Oil and Gas Enterprise.
“ONGC (Oil and Natural Gas Corp. Ltd) has won two onshore blocks in Myanmar," said a senior Indian government official, requesting anonymity. A top OVL executive, who also didn’t want to be identified, confirmed the development. OVL is the overseas arm of ONGC.
There has been considerable interest in Myanmar’s energy sector from neighbouring countries including China and India. Of Myanmar’s overall trade of around $19 billion, China accounts for around $5 billion, and India $2 billion. Of this latter, exports account for $542.7 million and imports $1.4 billion.
OVL has a presence in resource rich Myanmar with interest in five blocks. Overall, OVL has a portfolio of 32 assets across 16 countries. It invested $16.75 billion in acquiring these assets.
While oil importing countries like India are seeking to acquire energy assets overseas to shield themselves against possible supply shocks, Myanmar has made a precondition that its domestic demand should be met before any exports are allowed.
OVL has been ramping up its overseas portfolio. The Myanmar development comes in the backdrop of recent stake acquisitions in Mozambique’s Rovuma 1 offshore block, said to be the largest gas discovery off Africa’s east coast, with estimated recoverable reserves of 35-65 trillion cu. ft (tcf). Till now, state-owned firms have invested ₹ 64,832.35 crore on overseas energy assets.
According to an Export-Import Bank of India (Exim Bank) paper, Myanmar has natural gas reserves of around 2.54 trillion cubic metres (tcm) and has emerged as a major supplier of gas to its neighbours.
India has been trying to leverage its aid and loan programmes to counter Chinese influence on the South-East Asian economy. India’s total investments in Myanmar are around $273 million, and the number is expected to rise to $2.6 billion in the next few years. India is Myanmar’s fourth-largest trading partner after Thailand, Singapore and China.
However, India’s earlier attempts to secure gas supplies from Myanmar have not been successful. For instance, even as India tried to source gas from blocks in Myanmar, in which OVL and state-owned GAIL (India) Ltd together hold a 30% stake, the Myanmar government decided to sell the fuel to China. Subsequently, OVL and GAIL took stakes of 8.35% and 4.17%, respectively, in the pipeline being constructed by China National Petroleum Corp. to move gas from the offshore blocks A-1 and A-3 to China.
While OVL hopes to acquire 20 million tonnes per annum (mtpa) of capacity in overseas assets by 2020, India’s efforts at energy security have been a mixed bag in the backdrop of domestic production faltering.
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