UNION OF MYANMARMINISTRY OF ENERGY Country Report for Myanmar Presented by: U Kyaw Nyein Managing Director Myanma Oil and Gas Enterprise was established in Yenangyaung. Since then. . 2. The first Machine-Drilled Well was completed in 1887 and the first Rotary-Drilled Well was introduced in 1922. Ø The winds of WWII changed the atmosphere of the Myanmar Petroleum Industry abruptly. Ø Laos on the east. equipment and refineries were destroyed in 1942.COUNTRY REPORT FOR MYANMAR 1. Ø Another giant oil field " Chauk " was discovered in 1902. Ø The Myanmar national oil company was established in 1963 after the Myanmar Government took over the entire petroleum industry from BOC. Ø In 1886. The oil wells. the Petroleum Industry was still under the control of BOC till 1963. Ø Apart from BOC. Ø China on the north-east.577 km2 sharing borders with – Ø Bangladesh and India on the north-west. the Petroleum Industry has been entirely operated by Myanmar nationals only. Burmah Oil Company (BOC) which was a British company. Brief History of Myanmar Petroleum Industry Ø Myanmar petroleum industry evolved in the 10th century in Yenangyaung area of central Myanmar during the Pagan Dynasty. Ø After WWII. and Ø Thailand on the south-east. Introduction Myanmar has a total area of 676. ROC (Rangoon Oil Company) was established and carried out the refining and marketing. some other 30 smaller oil companies were active before WWII. It has a coastal strip of 2832km facing to the Bay of Bengal and Andaman Sea. Ø In 1871. the first foreign oil company. The population is about 50 million people with an average growth rate of 1.82% per annum. Ø The first Myanmar crude was exported in 1853.1- . Initially oil was extracted and used from the seepage and then from shallow hand dug wells. To prevent deforestation caused by excessive use of fuel wood and charcoal. in order to increase the energy production level : Ø Ø Ø Ø To maintain the status of energy independence. Energy Policy The Ministry of Energy of the Union of Myanmar has been meticulously pursuing the following energy policy. v 4. MOGE was responsible only for upstream activities. Currently. upstream and downstream activities were run as one entity. v To participate in and oversee the production Sharing Contracts (PSCs) in cooperation with foreign oil companies. To promote efficient utilization of energy and impress on energy conservation.2- . Starting from 1970. MOGE has about 13. working under the Ministry of Energy (MOE). Upstream Activities Myanma Oil and Gas Enterprise (MOGE). v To supply the Compressed Natural Gas (CNG) as a substitute fuel instead of gasoline for vehicles. Myanma Oil and Gas Enterprise (MOGE) is a 100 % State owned Enterprise and has the following basic responsibilities:v To explore and produce oil and gas by using its own resources. v To supply the domestic natural gas by constructing its own gas pipelines. 4 Organization MOGE is headed by the Managing Director. Departmental Heads and Oil and Gas Field General Managers exercise control in their respective departments and fields. / v v Myanma Petrochemical Enterprise (MPE) : Refineries/ Fertilizer Plants/ LPG Plant/ Methanol Plant/ etc Myanma Petroleum Products Enterprise (MPPE) :Marketing / distribution of petroleum products. .000 employees including 850 management staff. under whose direction. Under MOE. was established in 1963 after transactions between the Burma Oil Co. To save nonrenewable energy for future energy sufficiency of the nation. there are three state economic enterprises and one department. Myanma Oil and Gas Enterprise (MOGE) : Oil & gas exploration production / distribution.(1954)Ltd and the Myanmar Government.3. the Directors. v Energy Planning Department (EPD) : Coordinate / negotiate the development program in energy sector. Previously. Exploration & Develop 3.The following departments headed by the respective directors directly report to the Managing Director: 4. Out of 14. Drilling MINISTRY OF ENERGY 4. All the oil and gas fields are located in these 3 basins. only 3 basins (Central Myanmar. Pyay Embayment. Material Planning BOARD OF MANAGING DIRECTOR DIRECTORS 8.3- . Giant oil fields like Yenangyaung Field (Original Oil-in-Place 700 MMBBL) and Chauk Field (Original Oil-in-Place 500 MMBBL) were discovered over 100 years ago and are still being exploited.1 ORGANIZATION 1. Engineering 6. Administration 7. Finance 9. 14 sedimentary basins developed within the territory of onshore Myanmar. Production MYANMA OIL & GAS ENTERPRISE 5. Planning 2. Offshore EXPLORATION & DEVELOPMENT ADMINIADMINISTRASTRATION MATERIAL PLANNING FINANCE OFFSHORE PLANNING DRILLING PRODUCTION ENGINEERING 4. Geologically.2 Oil and Gas Fields of Myanmar (Onshore) Hydrocarbon prospects in Myanmar are conveniently evidenced by the long history of petroleum industry. and Delta Basins) have been actively explored for petroleum and the rest are either sparsely explored or not at all explored yet. CENTRAL MYANMAR PYAY AYEYARWADY DELTA . Oil is sent to the nearest refineries by barges and pipelines. Drilling of appraisal wells are being conducted for field development. which peaked at 11.000 bopd and 120 mmcfd gas from onshore oil and gas fields. cement factories and other industries by pipelines. Consequently. oil was extracted mainly from Chauk and Yenangyaung Oil Fields in the Central Myanmar Basin with an annual production of 3. 1 center Rig mobilization fleets / Construction fleets (for wellsite preparation.99 million barrels. Very recently.20 million barrels in 1984-85. ) Currently MOGE is producing about 10. After the establishment of the national oil enterprise. Yebawmi and Indaw areas are actively being conducted by MOGE. The produced gas is transmitted to gas turbines. commercial oil and gas were discovered in Thargyitaung-Sabe area in central Myanmar and Nyaungdon area in delta.Prior to 1963. frontier-explorations in the northern part of Myanmar such as Tanai. The oil and gas fields of Myanmar are listed as follows: Oil & Gas Fields Yenangyaung Ayadaw Chauk Payagon Myanaung Pyay Shwepyitha Pyalo Mann Letpando Peppi Htaukshabin Htantabin Kanni Apyauk Shwegu Kyaukkwet/Letpando Indaing Nyaungdon Thargyitaung Year of Discovery 1887 1893 1902 1959 1964 1965 1967 1969 1970 1974 1976 1978 1980 1985 1991 1994 1995 1996 1999 2001 Remarks Producing Producing Producing Suspended Producing Producing Producing Suspended Producing Produced for 2 years & suspended Producing Producing Suspended Producing Producing Suspended Producing Suspended Producing New discovery MOGE is currently operating its land operations by using the following its own resources handled by Myanmar national employees as follows: Surface geological field parties 4 parties Seismic acquisition party 2 parties Seismic processing center 1 center Magnetic / Gravity party 1 party Pipe laying force (up to 20" pipeline) 1 party Drilling rigs (various capacity 3000'-12500') 18 rigs Workover rigs 13 rigs Research Lab. . LPG plant.4- v v v v v v v v v . access road. new oil and gas fields were discovered increasing the yearly production. welllsite accommodation) / Well completion teams / Well repairing teams/ etc. fertilizer plants. methanol plant. MOGE has entered into PSC contracts with multinational oil companies since 1989 October for petroleum exploration and production in both onshore and offshore areas. refineries and other industries.3 Production Sharing Contracts (PSC) In order to increase the country's oil and gas production and reserve potential. urea plants (16%) and the rest goes to cement factories. The pipeline size varies from 6" up to 20". 4. The current land gas production is being supplied to gas turbines (65%). With the promulgation of the Foreign Investment Law and its related procedures in November 1988.5- .A total of about 1200miles land pipeline has been laid by MOGE own pipe laying fleet for domestic gas transmission. Recently 180miles of 20" pipeline was successfully constructed by MOGE's national team. A total of 46 onshore blocks and 25 offshore blocks for petroleum exploration and production have been apportioned in Myanmar . The gas is being transmitted from offshore Yadana Field through Kanbauk Pipeline Center. it is of key importance for Myanmar to introduce modern technology and foreign investment in addition to MOGE's own efforts. from Kanbauk to Myainggale where a new cement factory is just completed. v Reactivation of suspended Fields (RSF).3. Currently 7 PSC companies are working on 12 blocks.4. such as: v Exploration (EP). Exspan Sumatera Focus Energy Prime Resource TG World Block/Field(Area) Mann Field Yenangyaung Field Chauk Field RSF-6 (Mindegyi-Chaungtha) RSF-8 (YEnanma) RSF-5 (Ondwe) MOGE3(Padaukpin.Monatkon) Htaukshabin/Kanni Field EP-4 (Mayaman-Pyay West) RSF-2 (Tuyintaung) RSF-3 (Gwegyo-Ngashantaung) IOR-3 (Tetma) A total of 21 EP. 4 RSF and 3 IOR blocks are open for petroleum investment.1 Onshore PSC In onshore area. Since 1989. v Improved Oil Recovery (IOR)/Performance Compensation Contract (PCC). Block Type PSC Open Land Blocks Block Area (sq-miles) B2 C2 D E F G H I J K L M O P Q EP-1 EP-2 EP-3 MOGE-4 MOGE-6 MOGE-7 4 7 9 10 5. Current onshore operating foreign companies Company Myanmar Petroleum ResourcesLtd. Relinquished by Empire Oil Co. 3 types of PSCs are available. Exspan New New Myintha area Indaing Myanaung East Nyaunggon-Yedwet Padan Pyay-Pyalo Kanma-Nattaung RSF IOR Htantabin Field Myanaung Field Shwepyitha Field . 6 7 . Goldwater Westburne PT. 21 international companies have joined MOGE and signed 33 land PSCs. New New New Relinguished by PT.66297 10234 4763 4453 2530 5148 9940 1390 4438 2532 3905 3007 3970 4390 1536 438 519 637 352 1420 185 509 747 984 541 Remarks Relinquished by AMOCO Relinquished by YUKONG Relinquished by IDEMITSU Relinquished by PETRO-CANADA Relinquished by UNOCAL Relinquished by SHELL Relinquished by BHP Relinquished by CROFT Relinquished by KIRKLAND New Relinquished by South Pacific Co. A-2 A-3 A-4 A-5 A-6 A-7 M-1 M-2 M-3 M-4 M-7 M-8 M-9 M .16 M . Current Offshore Operating Companies Companies (Operator) Blocks TOTAL PREMIER DAEWOO M-5 / M-6 M-12 / M-13 / M-14 A-1 A total of 6 blocks in Rakhine Offshore.2 Offshore PSC In Myanmar offshore.4.15 M . From 1974 to 1976.17 Area(sq miles) 1455 2974 3277 4074 3795 3174 4013 3727 3000 4008 5163 4227 4535 5320 2810 5204 5338 5472 Remarks Rakhine Offshore " " " " " Moattama Offshore “ " “ " " " " " Tanintharyi Offshore " " . 9 blocks in Moattama Offshore and 4 blocks in Tanintharyi Offshore are open for petroleum investment.7- . Since 1990. between 1972 and 1987. 3 international companies are operating in 6 offshore blocks. a total of 7 international oil companies have signed 15 offshore PSCs. Currently.11 M . four foreign contractors conducted detailed seismic surveys and 18 wells were drilled including one gas discovery.10 M . Open Offshore Blocks Block Type PSC Block No.3. MOGE as an operator had carried out seismic survey over the area of interest and 27 wells have been drilled including Yadana and Badamyar Gas Field discoveries. 2.3.4.5 TCF 525 mmcfd 125 mmcfd 31.24 % 28.8- .00 % Onshore Facilities : Pipelines : Start of gas export : Project Cost : Wellhead Platform 1 (7 wells) Wellhead Platform 2 (7 wells) Production Platform Living Quarter Platform Flare Platform Pipeline Center Metering Station 216 miles 36" pipeline (Offshore) 39 miles 36" pipeline (Onshore) 1998 1200mm$ .1 Yadana Gas Project Location Blocks Sellers : : : Buyer : Reserves : Export DCQ : Domestic Gas : Offshore Facilities : Moattama Offshore M-5 / M-6 TOTALFINAELF UNOCAL PTTEP MOGE PTT Plc 6.50 % 15.26 % 25. 9- .2 TCF 200 / 400 mmcfd (about 30 bl condensate / mmcf) Drilling Platform (6 wells) Production Platform FSO Pipeline Center Metering Station 126 miles 24" pipeline (Offshore) 43 miles 24" pipeline (Onshore) 2000 about 700MM$ Offshore Facilities: Onshore Facilities: Pipelines : Start of gas export: Project Cost : .3.17 % MOGE 15.00 % NIPPON 14.00 % PTT Plc 3.4.2 Yetagun Gas Project Location Blocks Sellers : : : Buyer Reserves Export DCQ : : : Tanintharyi Offshore M-12 / M-13 / M-14 PREMIER 26.66 % PETRONAS 30.2.17 % PTTEP 14. 1 Methanol Plant & 1 Bitumen Plant in the country. ¨ Renegotiations clause specifically allows necessary adjustments/ amendments. 3 Urea Plants (1270 ton/day). in the event of situations arising not envisaged in the original contract. 3 Fertilizer Factory (Kyawzwa) (600 MT/D Capacity) LPG Extraction Plant (Minbu) (24mmcfd gas) Methanol Plant (Seiktha) (450 MT/D capacity) Bitumen Plant (Thanlyin) 2 skit mounted LPG plants (10 & 15mmcfd) ( to be installed) Myanma Petroleum Products Enterprise (MPPE) is responsible for marketing of petroleum products and operating 14 divisional marketing offices.4. Also a fleet of about 300 road tankers are operating through out the country to distribute various kinds of petroleum products. 4 main terminals.3. 5. ¨ No export duty levied on export of petroleum. 2 Refinery (Chauk) (6000 B/D capacity) Petrochemical Complex (Thanbayakan) (25000 B/D capacity) No. 1 Refinery (Thanlyin) (26000 B/D capacity) No. ¨ Accelerated depreciation (25 %) per year is allowed. The following attractive incentives are granted in Myanmar PSC terms.10 - . 2 Fertilizer Factory (Kyun Chaung) (207 MT/D capacity) No. ¨ Duties on import of petroleum industry-equipment/materials are exempted. Thank you * * * * * * . 1 LPG Plant. 35 sub-fuel terminals.000 bl/day). Reviewing the data together with Myanmar technical staff can be arranged to understand more about the oil and gas prospects of Myanmar. Terms and conditions for different types of PSC blocks are not rigidly fixed. ¨ Corporate Tax is 30 % on taxable income. Downstream Activities Myanma Petrochemical Enterprise (MPE) is operating 3 refineries (57. ¨ Domestic Market supply is priced at not too far reduced from fair market value. MPE Plants Refineries Urea Plants Others No. 1 Fertilizer Factory (Sale) (465 MT/D capacity) No. Investment opportunities are ample in the petroleum sector. All interested parties are cordially invited to invest in Myanmar. 2 Skid mounted LPG plants are going to be installed very soon. ¨ 3 years Tax Holiday is automatically granted. but negotiable.3 Investment Incentives Myanmar now offers an ideal politico-economic environment in addition to its attractive PSC Terms and geological prospectivity. 257 filling stations and 10 aircraft refueling stations.