Feb 2, 2012

Energy ministry reaps $25m windfall after block auction

THE Ministry of Energy will receive signing bonuses totalling about US$25 million from the winners of the latest onshore oil and gas block auctions, an oil and gas official familiar with the process said last week.
The signing bonus must be paid when each company submits its working commitment for the blocks and range between $2.5 and $3 million each, he added.
“Fifteen companies submitted 31 proposals for the 10 blocks, including eight foreign companies,” he said, adding that the winners included PT Istech Resources Asia from Indonesia and Smart, who will jointly explore the EP 5 block in Inbin-Tegyigon in Ayeyarwady Region.
“Production sharing contracts [for those blocks] are being negotiated,” he said.
The successful bidders were notified by the Energy Planning Department under the Ministry of Energy on December 23. The auction, which covered 18 blocks, was announced on July 8.
Thailand’s PTT Exploration and Production and Win Resources will jointly explore two blocks – the EP 2 block in Aunglan and PSC G block in Taungdwingyi, both in Magwe Region.
Swiss company Geo Petrol will explore RSF 9in Pyalo-Paukkaung, Bago Region, with A1 Construction; Malaysia’s Petronas and UNOG won the rights to RSF 2 and 3 in Tuyintaung, Magwe Region; China’s Tianjing New Highland and Suntac will explore the MOGE 4 block in Myintha, Ayeyarwady Region; Jubilant (India) and Parami Energy will explore the PSC I block at Hinthada in Ayeyarwady Region; and EPI Holdings and Aye Myint Khine will investigate the RSF 10 block at Kamma-Natlaung, Magwe Region.
“Only 10 blocks were awarded because no bids were submitted to the other eight.
“In the coming week, more onshore blocks will be opened for the auction by the Ministry of Energy,” the industry insider said.
U Htin Aung, director general of the Energy Planning Department under the Ministry of Energy, said foreign bidders were required to cooperate with a local company to facilitate the transfer of knowledge and technology.
“Most of the local companies that bid are service providers and have little knowledge of exploration and production. But we want local companies to learn more about these fields and in the future be able to conduct exploration and production by themselves,” he said.

Source: Myanmar Times