Wednesday, December 21, 2011

Thailand wins oil-drilling rights in Burma

Wednesday, 21 December 2011 16:47 Mizzima News

(Mizzima) – Thailand has learned that its largest petroleum company has won bids for two onshore petroleum blocks in Burma.

The PTT Exploration and Production Plc. (PTTEP) was told it  won two bids out of a total of 18 blocks offered to foreign oil companies, Thai Energy Minister Pica Naripthanphan said on Wednesday, Reuter’s news agency reported.

Oil and gas exploration bids were taken on 18 inland blocks in central Burma. Photo: Mizzima

"We won two, that's for sure," Pichai told reporters after a visit to Burma, adding the blocks were close to the capital, Naypyitaw. He said the news has not been officially announced. Winning companies would be required to set up joint ventures with local companies.

The news came at the end of an official visit by Thailand’s Prime Minister Yingluck Shinawatra to take part in the 4th Mekong Sub-Region Summit.

Pichai said he also discussed interest in investing in the offshore MD7 and MD8 fields.

Thailand and Myanmar have tentatively agreed to invest in a gas separation plant in Myanmar over the long term, he said.

China, Thailand, India and Singapore are the most active investors in Burma, which is in a process of opening up to international investments.

PTTEP, a flagship in the petroleum exploration business of PTT, has four projects in Burma and is a minority partner in the Yetagun and Yadana gas developments.

In addition, Thai companies are leading a huge project in Dawei in the country’s south to build a port and an economic zone, including pipelines to transport energy to Thailand

There are 47 oil and natural gas production blocks in inland Burma. China, which is extracting oil and gas in 23 of the 47 inland blocks, is the largest investor; Malaysia is the second largest.

If a company finds a productive field, it must then apply for a production permit granted by the ministry to extract oil and natural gas.

"After the agreement, in a case where the companies find productive fields, the government and the companies will need to negotiate to determine how much in profits must be given to the government and the amount of a cash award," said a Burmese official.

There is only one Burmese oil company, Myanmar Petroleum Resources Limited, which is owned by Michael Moe Myint. The Htoo Company owned by businessmen Tay Za and Nay Aung, who is the son of former Industry No. 1 Minister Aung Thaung, are shareholders in foreign oil and gas companies, according to sources close to the Ministry of Energy.

Currently, Burma’s inland blocks are producing more than 9,300 crude oil barrels a day and more than 100 million cubic feet of natural gas a day. The Yadana and Yetagun offshore natural gas blocks are producing more than 1 billion cubic feet of natural gas a day.

According statements by the Ministry of Energy, there are a total of 0.46 trillion cubic feet of natural gas in the inland area in Burma and 17 trillion cubic feet in offshore blocks.

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