A much-anticipated initiation to bid on oil exploration licenses for 18 of Myanmar’s onshore oil blocks has been released, the country’s Ministry of Energy announced on January 18.
The oil block auction follows the largest of its kind in 2011, where most bidders were China, Thailand or India, and is expected to draw more participants from Western nations now that sanctions have been eased in the former pariah state.
A senior energy minister told Reuters that “operations will be carried out under Production Sharing Contracts at 15 blocks and under Improved Petroleum Recovery Contracts at the remaining three blocks.”
Foreign companies will be limited to no more than three bids and would partner with state energy firms, including the controversial Myanma Oil and Gas Enterprise (MOGE).
Investors have been eagerly analyzing the frontier economy ever since President Thein Sein began his barrage of historical reforms that has lead to the shaking of the cabinet and a new investment law. Research firm IHS Global Insight has put Myanmar among the world’s top five potential oil and gas exploration and production hotspots.
According to officials, there are 22 foreign companies from nine countries currently operating exploration projects for oil in 18 blocks and for gas in five blocks of the country’s 28 onshore oil and gas blocks.
A recent gas discovery in 2011 was made at the offshore Shwe gas basin close to the Bangladeshi border, estimated to be between 4 and 8 trillion cubic feet.
Myanmar exported $3.5 billion worth of gas, mostly to Thailand in the fiscal year up to March 2012.
Total and Chevron already have operations in Myanmar, as well as some US firms.
Total, the French multinational oil and gas company, took a 40 per cent stake in an oil exploration field off the coast of Myanmar in its first investment in the country since 1992.