Saturday, 3 August 2013

Myanmar to award offshore blocks in 2014, onshore acreage in Dec 2013

Myanmar could formally award acreage from its highly anticipated offshore licensing round in February or March next year, an official at the Ministry of Energy said Wednesday.

"Right now we are doing the overview with the companies who have pre-qualified," Energy Planning Department Director Khin Khin Aye said.

Myanmar in April offered 30 blocks in its offshore licensing round -- 11 shallow water and 19 deepwater -- with a June 14 deadline for submission of formal expressions of interest, along with financial statements.


A notice on the ministry's website said that companies that had been pre-qualified in the bid round have been lined up for a "general data overview" since July 15.

According to the list, 61 oil and gas companies have been pre-qualified, including international oil majors Shell, ConocoPhillips, ExxonMobil, Total, Statoil, Eni and Repsol.

It also includes many Asian national oil companies such as China National Petroleum Corp., Korea National Oil Corp., Korea Gas Corp., Japan's JX Nippon Oil & Gas Exploration Corp. and India's ONGC Videsh, GAIL, OIL and Reliance Industries.

Other large independents who have pre-qualified include Anadarko Petroleum, Husky Energy, Hess, Murphy Oil, Premier Oil, Woodside Energy and Delek Energy.

Four companies are scheduled at each meeting, with the last group of five companies to be seen on August 12.

The ministry had said in April that companies were expected to have a proven track record of offshore operations.

Once pre-qualified, the government would give successful applicants the chance to look at more detailed information about the blocks on offer and the terms and conditions of the shallow and deepwater contracts.

The companies would subsequently be allowed to submit bids for up to three blocks, drawn from the list of shallow water blocks and/or the deepwater acreage.

For the shallow water blocks, companies will have to team up with at least one Myanmar-owned company, while for the deepwater blocks the companies will be expected to invest directly without any local participation, the ministry said.

ONSHORE BLOCKS TO BE AWARDED IN DECEMBER

Khin said the 18 blocks that were offered in Myanmar's second onshore licensing round announced in January are likely to be formally awarded in December.

The data review period was completed in June and the pre-qualified companies have until August 23 to submit their final proposals for the blocks, she added.

A total of 59 companies were pre-qualified in that round, including PTT Exploration and Production, Petronas, PetroVietnam, Sinopec, ONGC Videsh, Total, Eni, Woodside and Exxon.

Khin said the ministry plans to adjust certain terms in its PSCs to make it more attractive to foreign investment.

It is looking to reduce the income tax rate from 30% to 25%, and extend an existing three-year tax holiday to five years.

Existing PSCs stipulate a three-year exploration period followed by 20 years for production, with the royalty rate set at 12.5%.

For deepwater blocks, the state's share of production -- represented by state-owned Myanma Oil and Gas Enterprise -- ranges from 60% to 85% for crude oil and 55% to 80% for natural gas, with the cost recovery ceiling set at 70%.

MOGE's take for onshore blocks is between 60% and 90% for both crude and gas, depending on the volumes produced. Cost recovery is set at 50%.

Myanmar has been attracting oil and gas companies since US sanctions were lifted last year and investment sentiment has improved considerably after the former military government handed over power to President Thein Sein.


source: Platts
http://www.platts.com/latest-news/natural-gas/singapore/myanmar-to-award-offshore-blocks-in-2014-onshore-27251698

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