Norway’s Statoil and US-based ConocoPhillips will invest more than US$300 million in the exploration and production of offshore oil and gas in Myanmar, according to an official from the Ministry of Energy (MOE).
The two international oil companies signed a Production Sharing Contract (PSC) for deepwater block AD-10, located off Myanmar’s Rakhine coast, on April 30 according to the official.
“Statoil and ConocoPhillips have committed to investing $323.65 million, as well as $5 million as a signature bonus and $200,000 as a data fee for AD-10,” he said.
The PSC must be signed before exploration and production at the sites can begin.
The two firms will now conduct an environmental impact assessment and a social impact assessment. They will have two years to complete their research and another six years for exploration, said the official.
A total of 19 international oil companies were awarded exploration and production rights to 20 out of 30 oil and gas blocks, in an offshore bidding round in 2013.
Only one PSC now remains to be signed, by ROC Oil Company and Tap Oil, both from Australia, for shallow water block M-7.
Statoil and ConocoPhillips received permission from the Myanmar Investment Commission (MIC) in February for deepwater block AD-10, which has an area of 9000 square kilometers (3474 square miles) in water depths of around 2000 metres (6561 feet).
Each company will hold a 50 percent stake in the block, which will be operated by Statoil, according to a company press release last year.
“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,” said Erling Vågnes, senior vice president for Statoil, in a press release.
The Norwegian multinational oil and gas company operates upstream activities in more than 30 countries worldwide. ConocoPhillips is the world’s largest independent E&P company based on production and proved reserves, according to the company’s website.
Myanmar Oil and Gas Enterprise (MOGE) began signing PSCs with the winning international oil companies in December last year. Since then, including this most recent deal, a total of 19 contacts have been signed by international corporations including Berlanga Holding, BG Group, Canadian Foresight Group, Chevron, ConocoPhillips, Eni, Mercator Petroleum, Oil India, Oilmax Energy, Ophir Energy, PetroVietnam, Reliance Industries, Shell, Statoil, Total, Transcontinental Group and Woodside Energy.
The first offshore round opened in April 2013 and drew a high level of interest, with bids from 75 international oil and gas companies. The winners of 20 out of the 30 offshore blocks were announced in March 2014.
Foreign capital pledged to Myanmar’s oil and gas sector is nearly $17 billion, and $2.6 billion had already been invested during fiscal year 2015 by the end of January, according to statistics from the Myanmar Investment Commission (MIC).
Source: Myanmar Times