Chevron and MOGE execute production sharing contract in relation to offshore block A-5 in the Rakhine basin

» Posted on Apr 2, 2015 in Highlights

Chevron and MOGE execute production sharing contract in relation to offshore block A-5 in the Rakhine basin

Central Bank of Myanmar

Chevron and MOGE execute production sharing contract in relation to offshore block A-5 in the Rakhine basin

Unocal Myanmar Offshore (Unocal), a subsidiary of the Chevron Corporation, has been awarded exploration rights to the shallow water block A-5 in the Rakhine basin.  The award is part of the offshore bidding round which commenced in 2013. Pursuant to the production sharing agreement (PSC), Unocal has pledged to invest US$227.85 million in the block, while paying a US$3.5 million signature bonus and US$150,000 fee to access existing data.  The Unocal PSC marks the return of American oil and gas companies to Myanmar’s oil and gas sector after the U.S. Government agreed to relax certain of the economic sanctions it had previously imposed against Myanmar. Unocal’s involvement in Myanmar dates back to the 1990. The company still owns a non-operating 28.3% share in the offshore Yadana field. Under the PSC, Unocal holds a 99% interest in block A-5, with its local partners Royal Marine Engineering Ltd holding the remaining 1%. The shallow water A-5 block is one of the largest offshore blocks by size made available to date, with acreage of more than 10,000 square kilometers.(Source:

http://www.mmtimes.com/index.php/business/13734-unocal-s-production-deal-marks-the-return-of-american-energy.html,  25 March 2015)

Central Bank of Myanmar proposes to solve foreign exchange gap

The Central Bank of Myanmar (CBM) has stated that the growing gap between the Central Bank of Myanmar’s reference rate for kyat-US dollar conversions (CB Rate) and the market rate is unlikely to be prolonged. The CB Rate has remained unchanged at K1027 between 26 February 2015 and 26 March 2015, whereas many private lenders are independently pegging the rate as high as K1085 per US$1.  The gap between the official CB Rate and unofficial rates has grown steadily since February 2015. The CBM is currently evaluating whether the rate divergence is as a result of actual market demand or speculation. The Central Bank of Myanmar has warned banks and non-licensed financial institutions to stay within +/-0.8% of the CB Rate or risk actions from the CBM’s Foreign Management Department.  The Central Bank of Myanmar together with the Ministry of Commerce (MoC) have also downplayed concerns that Myanmar’s foreign currency reserves may be negatively affected due to the US$5 billion trade deficit forecast for the year ending 31 March 2015. A strengthening US dollar has meant imported consumer goods have become more expensive.  Typically this can lead to an increase in demand for relatively cheaper domestically produced goods. Director of the MoC Mr. U Win Myint said that this means the appreciation of the US$ against the Kyat may help to cut Myanmar’s trade deficit in the longer term. (Source: http://www.mmtimes.com/index.php/business/13758-central-bank-hopes-to-solve-forex-gap.html,  26 March 2015)

PT Pertamina Ltd conducting feasibility study in relation to the establishment of Myanmar gas stations

Indonesia’s state-owned oil and gas company PT Pertamina Ltd (Pertamina) has announced that it plans to expand its business operations into Myanmar and Cambodia. Pertamina has announced that it is currently conducting a feasibility study in relation to the establishment of two or three gas filling stations with an estimated combined cost of approximately US$10 million in both countries in order to strengthen its position in the region. A Pertamina spokesperson stated that the company sees a lot of opportunities in both Myanmar and Cambodia where the process of obtaining business permits is easier than in its native Indonesia. (Source: http://www.thuraswiss.com/update/myanmar-news-database, 19 March 2015)

Myanmar Customs Department announces plans to introduce new cargo clearance system

The Myanmar Customs Department said it plans to introduce a new Myanmar Automated Cargo Clearance System (MACCS). The MACCS, which is being developed with assistance from the Japan International Cooperation Agency (JICA), will automatically record information relating to the companies importing or exporting goods along with data regarding the import or export process. Additionally, the system will allow importers and exporters to choose between green, yellow and red customs channel for their goods, calculate the taxes owed and print green channel release orders. To date the JICA has provided approximately US$39 million in support of the project. (Source: http://www.mmbiztoday.com/articles/automated-cargo-clearance-plan-takes-shape-japanese-help, 23 March 2015)

Myanmar Petroleum Exploration and Production Company, BG Exploration & Production and Woodside Energy enter into offshore PSCs

The Myanmar Petroleum Exploration and Production Company Ltd (MPEP) has announced that it has entered into two production sharing contracts (PSCs) in relation to offshore blocks A-4 and A-7. MPEP will partner with UK-based BG Exploration & Production (Myanmar) Private Ltd (BG) and Australian company Woodside Energy Ltd (Woodside).  Pursuant to the two PSCs, MPEP holds 10% equity interest in both blocks. BG will operate block A-4 and Woodside will be operate block A-7. Block A-4 is located in water depths ranging from between 50-2,100 metres and is adjacent to the Ramree and Cheduba islands. Block A-7 is located in water depths ranging from between 50-2,400 metres and is located immediately to the south of block A-6 where MPRL E&P Pte Ltd made the first gas discovery in the southern Rakhine coastal region. (Source: http://www.mmbiztoday.com/articles/mpep-partners-sign-pscs-4-and-7, 24 March 2015)

Asian Development Bank forecasts 8.3% growth spurt for Myanmar

The Asian Development Bank (ADB) has predicted that economic growth in Myanmar will surge by over 8% over the next two years. The Asian Development Bank also urged Myanmar to continue to implement reforms prior to elections set to take place before the end of 2015. According to the Asian Development Bank Myanmar will see output grow from 7.7% in the twelve months ended 31 March 2014 to 8.3% in the twelve months ended 31 March 2015. It also predicted that GDP would grow at a similar rate. However the Asian Development Bank has also warned that Myanmar was likely to see a major increase in its fiscal deficit, rising from 4.3% of GDP in the twelve months ended 31 March 2014 to 6.3% in the twelve months ended 31 March 2015.  The Asian Development Bank also reported a 10% increase in business registrations in nine months ended 31 December 2014 indicating that “business confidence remains robust”.  FDI in Myanmar increased to US$6.6 billion between April and December 2014 from US$4 billion in the twelve months ended 31 December 2013.

(Source: http://www.themalaymailonline.com/money/article/adb-myanmar-set-for-8.3pc-growth-spurt#sthash.0D9oQMxz.dpuf, 24 March 2015)

    Central Bank of Myanmar

    PT Pertamina expand business to Myanmar and Cambodia

    Asian Development Bank

    Central Bank of Myanmar reference rate for Kyat-US dollar conversion

    PT Pertamina Myanmar feasibility study

    Asian Development Bank forecasts 8.3% growth spurt for Myanmar

    FDI in Myanmar

    Unocal Myanmar Offshore exploration rights to shallow water block A-5 in Rakhine basin, Myanmar

    Myanmar Automated Cargo Clearance System

    Myanmar Petroleum Exploration and Production Company BG partner with Exploration & Production (Myanmar) Private and Woodside Energy

    Foreign Exchange Bank in Myanmar
    Indonesia Oil and Gas company PT Pertamina
    Foreign Banks in Myanmar
    Myanmar Banks

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