Offshore oil and gas exploration block winners announced: Ministry of Energy

Burma’s Ministry of Energy announced the winners of 20 offshore oil concessions – ten shallow-water, ten deep-water – on Wednesday, the results of the country’s first open exploration and production tendering process for offshore resources.

An additional ten exploration blocks were offered to potential investors at the outset of the bidding process, but these have not yet been awarded. A Ministry of Energy official told DVB that the blocks in question did not receive any bids, and would be relisted in the future.

Unlike earlier concessions granted to foreign oil firms, the winning companies are mostly based in Europe, the United States and Australia, although two Indian bidders – industrial conglomerate Reliance and a consortium led by state-run Oil India – were granted two shallow-water concessions each. Exploration and production activities currently take place in 18 blocks off the coast of Burma, dominated by Asian firms – including Thailand’s PTTEP, Malaysia’s Petronas, and CNOOC from China – granted concessions by Burma’s old military regime.

A joint bid by British E&P firm BG and Australia’s Woodside was the single largest winner in the bidding process, earning the rights to explore and develop two shallow-water and two deep-water blocks. Netherlands-based Shell, the largest oil company in the world, was granted three deep-water blocks, the most allotted to any single company.

Familiar winning names include Total, which won rights to the deep-water YWB block in the Gulf of Martaban, and Chevron, which will explore the shallow-water A5 block off the coast of southern Arakan State. Total and Chevron, which jointly operate the offshore Yadana oilfield in southern Burma, are the only two companies with existing E&P operations in the country to have won in the tendering process.

The three remaining shallow-water blocks went to ROC Oil and Transcontinental from Australia, as well as Berlanda, a Dutch E&P firm. Italy’s ENI secured rights to two deep-water blocks, with the remaining two going to UK-based Ophir and a joint bid by Norwegian firm Statoil and US-based ConocoPhillips.

Seventy-five companies initially expressed interest in developing the new blocks, which the Ministry of Energy whittled down to a “shortlist” of 61 companies last July. Thirty companies ultimately submitted exploration proposals to the government, from which the winners of this most recent round were drawn. Two local bids – from MPRL E&P, owned by Michael Moe Myint — the former personal pilot of dictator Ne Win — and Twinza Oil, backed by Australian mining magnate Bill Clough, were unsuccessful.

Although oil and gas has long been one of the Burmese government’s most important revenue sources, both the near-term and long-term economic effects of the new exploration licences could be significant. “It’s a huge volume of tenders in a country where the economy isn’t terribly big. If a lot of these [companies] get into exploration soon, it could create a strong demand for the human resources needed to do exploration,” said Jared Bissinger, a development economist and PhD candidate at Macquarie University in Australia. “There’s only a limited supply of skilled labour in the country as-is, and [exploration and production activities] could have an effect at the macro level in terms of skilled labour.”

For now, the windfall hoped for by the Burmese government remains a long way off. “Realistically, for most of these tenders, they aren’t going to [start producing] for seven or ten years,” Bissinger said. “It’s not something that’s going to have a near-term effect on government revenue, but long-term it has the potential to be a significant revenue source.”

http://www.dvb.no/news/offshore-oil-and-gas-exploration-block-winners-announced-burma-myanmar/38978

 

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About artidj

I started working as a field engineer in Oil & Gas industry back in 1996. I do this news clipping of the industry and the geography I am interested in, mainly for my own information. I'm glad you find it useful.
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