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UK and India ramp up Myanmar oil and gas interest

Myanmar's efforts to boost its global attractiveness to companies looking to exploit its estimated 50 million barrels of oil and 280 billion cubic metres of natural gas have taken another step forward with the announcement of new production sharing agreements with Indian and UK representatives.

After the state announced that it was opening up new exploration blocks in addition to the 40 it has awarded to oil giants including Total, Shell and Chevron, it was expected that further sector announcements would not be made until 2015, yet the Ministry of Energy’s Myanma Oil and Gas Enterprise (MOGE) has revealed that new production sharing agreements have now been signed by UK and Indian companies.

UK interest

Firstly, UK-based Ophir announced a new contract which finalises the award of Block AD-03, which is located in the Rakhine Basin offshore Myanmar, and in which Ophir already has a 95 per cent operated interest.

MOGE received a US$6.5 million signing bonus and $1.26 million as a data fee, with the companies spending $258.3 million on a one-year observation period and six months exploration period for the block, which is approximately 10,000 sq km in size and is on trend with the multi-TCF producing Shwe gas field.

As part of the initial exploration period, Ophir will re-process existing 2D seismic data and acquire new 3D seismic data, revealed chief executive Nick Cooper.

He added: "Ophir is continuing to act counter cyclically to expand its exploration portfolio. The Block AD-03 PSC contains multiple mapped prospects with world-class potential and we now look forward to completing a 3D seismic survey to refine this prospectivity."

Indian investment

Meanwhile, a new contract has been signed for blocks M-4 and YEB by a consortium involving Mercator Petroleum, Oil India, OilMax Energy Pvt Ltd and Oil Star Management Service Co.

The two oil and gas blocks, which are located in shallow waters, cover approximately 10,380 sq km and 21,297 sq km respectively, with Oil India set to be the designated operator of both.

Mercator has a 25 per cent participating interest in both the blocks, with MOGE receiving a $6 million signing bonus and $20,000 as a data fee, and the company spending around $120.9 million on a one-year observation period and a six-month exploration period for the two blocks.

Another key part of the agreement will be foreign companies conducting environmental and social impact assessments for the blocks; something which Myanmar hopes to apply to all companies operating within its borders.

The development is the latest indication that Myanmar shows no signs of slowing down as it aims to draw in new interest and investment and help to stimulate the upward curve of its oil and gas industry and untapped reserves in the coming years.

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