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UNION OF MYANMAR

MINISTRY OF ENERGY

Country Report for Myanmar

Presented by:
U Kyaw Nyein
Managing Director
Myanma Oil and Gas Enterprise

COUNTRY REPORT FOR MYANMAR


1.

Introduction

Myanmar has a total area of 676,577 km2 sharing


borders with
Bangladesh and India on the north-west,
China on the north-east,
Laos on the east, and
Thailand on the south-east.
It has a coastal strip of 2832km facing to the Bay of
Bengal and Andaman Sea.
The population is about 50 million people with an
average growth rate of 1.82% per annum.

2.

Brief History of Myanmar Petroleum Industry

Myanmar petroleum industry evolved in the 10th century in Yenangyaung area of


central Myanmar during the Pagan Dynasty. Initially oil was extracted and used from
the seepage and then from shallow hand dug wells.
The first Myanmar crude was exported in 1853.
In 1871, the first foreign oil company, ROC (Rangoon Oil Company) was established
and carried out the refining and marketing.
In 1886, Burmah Oil Company (BOC) which was a British company, was established
in Yenangyaung. The first Machine-Drilled Well was completed in 1887 and the first
Rotary-Drilled Well was introduced in 1922.
Another giant oil field " Chauk " was discovered in 1902.
Apart from BOC, some other 30 smaller oil companies were active before WWII.
The winds of WWII changed the atmosphere of the Myanmar Petroleum Industry
abruptly. The oil wells, equipment and refineries were destroyed in 1942.
After WWII, the Petroleum Industry was still under the control of BOC till 1963.
The Myanmar national oil company was established in 1963 after the Myanmar
Government took over the entire petroleum industry from BOC. Since then, the
Petroleum Industry has been entirely operated by Myanmar nationals only.

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3.

Energy Policy

The Ministry of Energy of the Union of Myanmar has been meticulously pursuing
the following energy policy, in order to increase the energy production level :

To maintain the status of energy independence,


To save nonrenewable energy for future energy sufficiency of the nation,
To promote efficient utilization of energy and impress on energy conservation,
To prevent deforestation caused by excessive use of fuel wood and charcoal.

Under MOE, there are three state economic enterprises and one department.

4.

Energy Planning Department (EPD) : Coordinate / negotiate the


development
program
in
energy sector.

Myanma Oil and Gas Enterprise (MOGE) : Oil & gas exploration
production / distribution.

Myanma Petrochemical Enterprise (MPE) : Refineries/ Fertilizer Plants/


LPG Plant/ Methanol Plant/
etc

Myanma Petroleum Products Enterprise (MPPE) :Marketing / distribution


of petroleum products.

Upstream Activities

Myanma Oil and Gas Enterprise (MOGE), working under the Ministry of Energy
(MOE), was established in 1963 after transactions between the Burma Oil Co.(1954)Ltd
and the Myanmar Government. Previously, upstream and downstream activities were run
as one entity. Starting from 1970, MOGE was responsible only for upstream activities.
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,
v To supply the Compressed Natural Gas (CNG) as a substitute fuel instead of
gasoline for vehicles,
v To participate in and oversee the production Sharing Contracts (PSCs) in
cooperation with foreign oil companies.

Organization

MOGE is headed by the Managing Director, under whose direction, the Directors,
Departmental Heads and Oil and Gas Field General Managers exercise control in their
respective departments and fields. Currently, MOGE has about 13,000 employees
including 850 management staff.

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The following departments headed by the respective directors directly report to the
Managing Director:
4.1 ORGANIZATION
1. Planning
2. Exploration & Develop
3. Drilling
MINISTRY OF ENERGY
4. Production
MYANMA OIL & GAS ENTERPRISE
5. Engineering
6. Administration
7. Material Planning
BOARD OF
MANAGING DIRECTOR
DIRECTORS
8. Finance
9. Offshore

PLANNING

4.2

EXPLORATION
&
DEVELOPMENT

DRILLING

PRODUCTION

ENGINEERING

ADMINIADMINISTRASTRATION

MATERIAL
PLANNING

FINANCE

OFFSHORE

Oil and Gas Fields of Myanmar (Onshore)

Hydrocarbon prospects in Myanmar are conveniently evidenced by the long


history of petroleum industry. 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.
Geologically, 14 sedimentary basins
developed within the territory of onshore
Myanmar.
Out of 14, only 3 basins (Central
Myanmar, Pyay Embayment, and Delta
Basins) have been actively explored for
petroleum and the rest are either
sparsely explored or not at all explored
yet. All the oil and gas fields are located
in these 3 basins.

CENTRAL MYANMAR

PYAY

AYEYARWADY
DELTA

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Prior to 1963, oil was extracted mainly from Chauk and Yenangyaung Oil Fields in
the Central Myanmar Basin with an annual production of 3.99 million barrels. After the
establishment of the national oil enterprise, new oil and gas fields were discovered
increasing the yearly production, which peaked at 11.20 million barrels in 1984-85. The
oil and gas fields of Myanmar are listed as follows:
Oil & Gas
Fields

Year of
Discovery

Yenangyaung
Ayadaw
Chauk
Payagon
Myanaung
Pyay
Shwepyitha
Pyalo
Mann
Letpando

1887
1893
1902
1959
1964
1965
1967
1969
1970
1974

Peppi
Htaukshabin
Htantabin
Kanni
Apyauk
Shwegu
Kyaukkwet/Letpando
Indaing
Nyaungdon
Thargyitaung

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:
v
v
v
v
v
v
v
v
v

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.
1 center
Rig mobilization fleets / Construction fleets (for wellsite preparation, access
road, welllsite accommodation) / Well completion teams / Well repairing
teams/ etc. )
Currently MOGE is producing about 10,000 bopd and 120 mmcfd gas from
onshore oil and gas fields. Oil is sent to the nearest refineries by barges and pipelines.
The produced gas is transmitted to gas turbines, fertilizer plants, methanol plant, LPG
plant, cement factories and other industries by pipelines.
Very recently, commercial oil and gas were discovered in Thargyitaung-Sabe area
in central Myanmar and Nyaungdon area in delta. Drilling of appraisal wells are being
conducted for field development. Consequently, frontier-explorations in the northern part
of Myanmar such as Tanai, Yebawmi and Indaw areas are actively being conducted by
MOGE.
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A total of about 1200miles land pipeline


has been laid by MOGE own pipe laying
fleet for domestic gas transmission. The
pipeline size varies from 6" up to 20".
Recently 180miles of 20" pipeline was
successfully constructed by MOGE's
national team, from Kanbauk to Myainggale
where a new cement factory is just
completed. The gas is being transmitted
from offshore Yadana Field through
Kanbauk Pipeline Center. The current land
gas production is being supplied to gas
turbines (65%), urea plants (16%) and the
rest goes to cement factories, refineries
and other industries.

4.3

Production Sharing Contracts (PSC)


In order to increase the country's oil and gas
production and reserve potential, it is of key
importance for Myanmar to introduce modern
technology and foreign investment in addition
to MOGE's own efforts.
With the promulgation of the Foreign
Investment Law and its related procedures in
November 1988, MOGE has entered into PSC
contracts with multinational oil companies since
1989 October for petroleum exploration and
production in both onshore and offshore areas.
A total of 46 onshore blocks and 25 offshore
blocks for petroleum exploration and production
have been apportioned in Myanmar

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4.3.1

Onshore PSC
In onshore area, 3 types of PSCs are available, such as:
v
Exploration (EP),
v
Improved Oil Recovery (IOR)/Performance Compensation Contract (PCC),
v
Reactivation of suspended Fields (RSF).
Since 1989, 21 international companies have joined MOGE and signed 33 land

PSCs.
Currently 7 PSC companies are working on 12 blocks.
Current onshore operating foreign companies
Company
Myanmar Petroleum ResourcesLtd.
Goldwater
Westburne
PT. 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.
Block
Type

Open Land Blocks


Block
Area
(sq-miles)

PSC

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

RSF

4
7
9
10

509
747
984
541

IOR

5.
6
7

Htantabin Field
Myanaung Field
Shwepyitha Field
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6297
10234
4763
4453
2530
5148
9940
1390
4438
2532
3905
3007
3970
4390
1536
438
519
637
352
1420
185

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.
Relinquished by Empire Oil Co.
New
New
New
Relinguished by PT. Exspan
New
New
Myintha area
Indaing
Myanaung East
Nyaunggon-Yedwet
Padan
Pyay-Pyalo
Kanma-Nattaung

4.3.2

Offshore PSC

In Myanmar offshore, between 1972 and 1987, 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. From 1974 to 1976, four foreign
contractors conducted detailed seismic surveys and 18 wells were drilled including one
gas discovery.
Since 1990, a total of 7 international oil companies have signed 15 offshore PSCs.
Currently, 3 international companies are operating in 6 offshore blocks.
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, 9 blocks in Moattama Offshore and 4


blocks in Tanintharyi Offshore are open for petroleum investment.

Open Offshore Blocks


Block Type
PSC

Block No.
A-2
A-3
A-4
A-5
A-6
A-7

Area(sq miles)
1455
2974
3277
4074
3795
3174

Remarks
Rakhine Offshore
"
"
"
"
"

M-1
M-2
M-3
M-4
M-7
M-8
M-9
M - 10
M - 11

4013
3727
3000
4008
5163
4227
4535
5320
2810

Moattama Offshore

"

"
"
"
"
"

M - 15
M - 16
M - 17

5204
5338
5472

Tanintharyi Offshore
"
"

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4.3.2.1 Yadana Gas Project

Location
Blocks
Sellers

:
:
:

Buyer
:
Reserves
:
Export DCQ :
Domestic Gas :
Offshore Facilities :

Onshore Facilities :
Pipelines

Start of gas export :


Project Cost :

Moattama Offshore
M-5 / M-6
TOTALFINAELF
UNOCAL
PTTEP
MOGE
PTT Plc
6.5 TCF
525 mmcfd
125 mmcfd

31.24 %
28.26 %
25.50 %
15.00 %

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$

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4.3.2.2 Yetagun Gas Project

Location
Blocks
Sellers

:
:
:

Buyer
Reserves
Export DCQ

:
:
:

Tanintharyi Offshore
M-12 / M-13 / M-14
PREMIER
26.66 %
PETRONAS 30.00 %
NIPPON
14.17 %
PTTEP
14.17 %
MOGE
15.00 %
PTT Plc
3.2 TCF
200 / 400 mmcfd
(about 30 bl condensate / mmcf)

Offshore Facilities:

Onshore Facilities:
Pipelines

Start of gas export:


Project Cost :

Drilling Platform
(6 wells)
Production Platform
FSO
Pipeline Center
Metering Station
126 miles 24" pipeline (Offshore)
43 miles 24" pipeline (Onshore)
2000
about 700MM$

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4.3.3

Investment Incentives

Myanmar now offers an ideal politico-economic environment in addition to its


attractive PSC Terms and geological prospectivity. Investment opportunities are ample in
the petroleum sector. The following attractive incentives are granted in Myanmar PSC
terms.
Duties on import of petroleum industry-equipment/materials are exempted.
3 years Tax Holiday is automatically granted.
Corporate Tax is 30 % on taxable income.
No export duty levied on export of petroleum.
Accelerated depreciation (25 %) per year is allowed.
Domestic Market supply is priced at not too far reduced from fair market value.
Renegotiations clause specifically allows necessary adjustments/ amendments,
in the event of situations arising not envisaged in the original contract.
Terms and conditions for different types of PSC blocks are not rigidly fixed, but
negotiable. Reviewing the data together with Myanmar technical staff can be arranged to
understand more about the oil and gas prospects of Myanmar. All interested parties are
cordially invited to invest in Myanmar.
5.

Downstream Activities

Myanma Petrochemical Enterprise (MPE) is operating 3 refineries (57,000 bl/day),


3 Urea Plants (1270 ton/day), 1 LPG Plant, 1 Methanol Plant & 1 Bitumen Plant in the
country. 2 Skid mounted LPG plants are going to be installed very soon.
MPE Plants
Refineries Urea Plants Others -

No. 1 Refinery (Thanlyin)


(26000 B/D capacity)
No. 2 Refinery (Chauk)
(6000 B/D capacity)
Petrochemical Complex (Thanbayakan) (25000 B/D capacity)
No. 1 Fertilizer Factory (Sale)
(465 MT/D capacity)
No. 2 Fertilizer Factory (Kyun Chaung) (207 MT/D capacity)
No. 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 main terminals, 35
sub-fuel terminals, 257 filling stations and 10 aircraft refueling stations. Also a fleet of
about 300 road tankers are operating through out the country to distribute various kinds of
petroleum products.

Thank you
* * * * * *
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