Oct 20, 2014

Myanmar to open more oil exploration blocks to investors

Myanmar will release another 15 oil exploration blocks by the end of next year to international investors, on top of the 40 blocks that have been awarded to the likes of Total, Shell and Chevron.

Myanmar is further opening its oil and gas sector to international investors. It will release another 15 oil exploration blocks by the end of next year.

So far, 40 blocks have been awarded to the likes of Total, Shell and Chevron. The number is only half of what is available in the resource-rich nation.

Than Min, Director of Planning Department, Myanma Oil and Gas Enterprise, said: "Our expectations are high to discover more oil and gas. So it will contribute a lot to Myanmar people.
We need to manage revenues from these projects. Then our development programme will be oriented to people development."

But there are concerns about regulation in the sector. Myanmar's Energy Ministry plans to team up with a private company to offer oilfield services. But there are fears this could squeeze the smaller players.

Kyaw Kyaw Hlaing, Chairman of Myanmar Oil & Gas Services Society, said: "We welcome it but everybody must be on a level playing field. They should compete together with the other service companies. They shouldn't, as a regulator, take advantage and tell the oil companies that you must give it to this joint venture company. This is the concern from the local service companies and service companies overseas, also."

London-based advocacy group, Global Witness, added there needs to be more transparency. At present, some 20 firms have refused to disclose their ownership details. But for now, that is not bothering the locals.

"For me, my concern is more about how you earn the money. If your money earning is right, I don't really care who is behind this company," said Kyaw Kyaw Hlaing, Chairman of Myanmar Oil & Gas Services Society.

The problem is that foreign investors may care. At an oil and gas conference in Yangon, many of the exhibitors from over 20 countries and regions such as Singapore, Australia and the UK said they do not have operations or business transactions in Myanmar.

But they are keen to enter the oil and gas market as it continues to liberalise. And that is no surprise, given how this sector has attracted the second largest foreign investments in Myanmar, amounting to over US$15 billion as of August this year.

That contributes to about 30 percent of Myanmar's total foreign investments. The plan now is to pump the money back into the economy. Myanmar says it will first focus its policy on servicing the domestic market, rather than exports.

Source: Channel News Asia

 
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