Government Names Pre-Qualified Companies in Offshore Oil and Gas Bidding Process


Myanrmar Highlights	27 September 2013

Government Names Pre-Qualified Companies in Offshore Oil and Gas Bidding Process • Government Names Pre-Qualified Companies in Offshore Oil and Gas Bidding Process– Myanmar’s energy ministry has announced successful prequalifiers in the latest round of oil and gas tenders. Following the successful implementation of the Shwe Gas pipelines operated by DaeWoo from Ramree Island in Rakhine State to Muse in Yunnan, China, the international oil and gas industry is poised to develop 48 offshore and onshore blocks between 120 companies. Pre-qualifiers may now proceed to gather statistics and information on seismic data, prior to submission of up to three bids, scheduled for awards in March or April of 2014. As noted in Myanmar Business Today, U Aung Tun Thet of the President’s National Economic and Social Advisory Council compares Myanmar’s location and advantages to Austria’s central role in European prosperity. “I think we can do the same thing, be a corridor to the east, west, north and south linking China and India.” Experts note that this latest round of tenders has attracted large-scale global interest and major investment players, which will provide incentives and revenues for much-needed economic expansion and regional prosperity. The eighteen on-shore blocks are located primarily in Central, South and South-East Myanmar, and bidders include largely Asian firms with their Myanmar partners such as Brunei National Petroleum, ENI International, Mitsui Oil Exploration, Nido Petroleum, Nippon Oil & Gas Exploration, Oil India Ltd., ONGC Videsh, Petronas, PetroVietnam, Prize Petroleum and Woodside Energy. Tender offers for the thirty off-shore blocks do not currently include Myanmar companies as partners for the deepwater blocks, as noted by U Ken Tun of Parami Oil and Gas (Myanmar Times Sep 20-27). There are 11 shallow-water and 19 deep-water blocks on offer. Asian bidders include China National Petroleum Corporation, Korea Gas Corporation, Korea National Oil Corporation, Nippon Oil & Gas Exploration Corp. and PTTEP (Thailand). Further international interest has been expressed by major corporations such as Anadarko Petroleum, Chevron, Conoco Phillips, Delek Energy, Exxon Mobil, ENI, Hess Corporation, Husky Energy, Murphy Oil, Premier Oil, Repsol, Santos, Shell Oil, Statoil, Total, and Woodside Energy. Blocks are located in the Bay of Bengal, primarily in Mottama, Rakhine and Tanintharyi basins.	In general, terms and conditions will remain as originally listed although upcoming regulation-making and Parliamentary discussions may include some changes to Production Sharing Contracts, tax holidays increased to 5 years and income tax to 20%. The energy ministry notes that 25% of natural gas and 20% of crude oil will be reserved for domestic supply at 90% of market value, as well as royalty fees and taxes. The Myanmar Oil & Gas Enterprise (MOGE) maintains the right to acquire 15% to 25% of undivided interest in the event of commercial hydrocarbon discovery. Myanmar’s existing hydrocarbon production is a large part of MOGE (Myanmar Oil & Gas Enterprise) resources at the Man, Yetagun and Yadana fields, operated by Total E&P and Petronas, as well as PTTEP gas reserves at Gawthika, Shwepyihtay, and Kokona primarily exported to Thailand. Industry experts calculate that the additional on-shore and off-shore facilities will hugely increase the availability of hydrocarbons, of which less than one-third have been explored. Northern areas of the Shan and Kachin states hold unexplored reserves in Hsipaw-Lashio, Hukaung, Kalaw, Namyau, Shwebo-Monywa, while southern areas of Rakhine and the Bago Yoma, as well as the Sittaung Valley and Mawlamyine are also candidates for exploration. While gas and oil production is the major focus of the current tenders, there is significant interest in other alternative resources, including thermal power, coal, geothermal, solar/ photovoltaics, wind, hydropower and biomass products. While some of these may be newer technologies, there is significant interest in developing these sustainable resources for Myanmar – and the world’s – energy future. A current example of on-shore alternative energy production is the pending 500MW Thermal Power plant to be constructed in Thaketa Township as a roll-out to the Thilawa SEZ. The project will be built by Japan’s Hanza International and a consortium of 18 companies, while Myanmar will provide infrastructure such as roads and bridges. The overall Thilawa project will include factories, high-tech industry, textiles and manufacturing and is a joint venture between Myanmar and Japan. A number of ancillary developments such as housing, hotels, schools, entertainment and shopping centres will provide additional community and economic benefits. Investment through Immigration incentives – Permanent Residency Scheme Bill will go to Hluttaw. • Myanmar Business Today reports that U Khin Yee, Minister for Immigration and Population, has stated that a new Permanent Residency Scheme (PRS) is under consideration to attract long-term investment and encourage the return of overseas Myanmar professionals. According to President’s Officer Minister U Soe Thane, the Permanent Residency Scheme would be issued only to foreign nationals who are specialists “helping to develop the country”, and would be issued in two categories for a three-year or five-year basis.

	Myanmar Offshore Oil and Gas Bidding Process Myanmar Oil & Gas Enterprise MOGE Myanmar Permanent Residency Scheme PRS Pre-qualified companies named in Myanmar Offshore Oil and Gas Bidding Process Myanmar Oil & Gas Enterprise commercial hydrocarbon discovery Myanmar Ministry for Immigration and Population Permanent Residency Scheme National Economic and Social Advisory Council Gas and oil production Myanmar Alternative resources Thaketa Township thermal Power plant Onshore Oil and Gas Myanmar Oil and Gas Moge Myanmar Charltons Best Boutique Firm 2013 Asian Legal Business Awards This newsletter is for information purposes only. Its contents do not constitute legal advice and it should not be regarded as a substitute for detailed advice in individual cases. Transmission of this information is not intended to create and receipt does not constitute a lawyer-client relationship between Charltons and the user or browser. Charltons is not responsible for any third party content which can be accessed through the website. If you do not wish to receive this newsletter please let us know by emailing us at unsubscribe@charltonslaw.com Hong Kong Office: Dominion Centre 12th Floor 43-59 Queen’s Road East Hong Kong Tel: + (852) 2905 7888 Fax: + (852) 2854 9596 Myanmar Office: Charltons Legal Consulting Ltd 161, 50th Street Yangon, Myanmar email: myanmar@charltonslaw.com