Myanmar Oil and Gas Enterprise (MOGE) will not launch any new onshore or offshore bidding rounds this year, and will focus instead on the development of recently contracted blocks, the state-owned enterprise said last week.
“We are not going to launch any more bidding until 2016, as previous bidding rounds are still ongoing. In the meantime, we will closely monitor active PSCs [Production Sharing Contracts],” said U Myo Myint Oo, managing director of MOGE at a press conference in Nay Pyi Taw on May 7.
“We will also keep the current blocks to improve the production of petroleum reserves,” he said.
He did not provide any information on how many onshore and offshore blocks would be made available in the next round.
MOGE has conducted three international bidding rounds for a number of onshore and offshore blocks since the nominally civilian government took office in 2011.
Before this, as a result of Western sanctions, a majority of investors into Myanmar’s oil and gas sector were Asian companies.
The first onshore bidding round for 18 blocks was launched in 2011 and nine blocks were awarded to international companies.
In 2013, the second onshore bidding round for 18 blocks and the first offshore round for 30 blocks were launched. Of these, a total of 16 onshore and 20 offshore blocks were awarded.
Since then, MOGE has been signing PSCs for awarded blocks with the winning international companies and their local partners. Only a few PSCs remain to be signed, ending a year-long process.
“There is much potential in both the onshore and offshore area. But it will take time to reach the development and production stage,” said U Myo Myint Oo.
International oil companies will not immediately begin drilling campaigns in recently contracted blocks, as social and environmental impact assessment surveys and seismic acquisition activities will take more than a year to complete, according to industry experts.
Production is unlikely to begin at any of the recently awarded blocks until 2028, said a senior geologist from the Ministry of Energy, during the 5th Myanmar Oil & Gas Exhibition in Yangon.
Myanmar has a total of 104 oil and gas blocks including 53 onshore and 51 offshore blocks. At present, 16 onshore and 19 offshore blocks are in operation, according a Ministry of Energy source.
Total current production is 8000 barrels of petroleum and 55 million cubic feet per day of natural gas from the onshore fields and 7000 barrels of condensate and around 2 billion cubic feet per day of natural gas from Myanmar’s offshore fields, said a geologist from the Ministry of Energy.
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).
In the future, MOGE has plans to look into the production of unconventional resources, such as shale gas, according to sources at the state-owned enterprise. However, for the time being, it will continue focus on conventional petroleum exploration.
Source: Myanmar Times