Myanmar Oil Fields Put Up for Tender
Myanmar has just begun an exhaustive survey to court foreign investment to help explore its rich oil and natural gas reserves. The lucrative bonanza lies just off of the long Burma coastline and can become a huge economic windfall for aiding redevelopment or any national requirements.
Some of the biggest oil companies in the world are queuing up to add their tender for the lucrative projects and the Myanmar authorities have a lot of hard work to do going through such applications. With such an enormous amount of capital at stake and the world media now looking at Burma to keep its environmental good name the pressure is on to find the most suitable suitor.
Big hitters such as Royal Dutch Shell, Exxon, Total and China National Petroleum Corporation will be targeting the shortlist. The process is likely to last at least eight months in order to provide adequate time to ascertain the financial commitment and technological capacities of the applicants. The work is to target deep water exploration and drilling requirements so will attract some notable benefits to the winning company by up to 25% tax cuts on project work and tax payment holiday extensions of perhaps three to five years.
There is to be 30 offshore blocks available for exploration and exploitation but it is already known the lucrative areas will be the 19 deep water blocks where the highest potential for riches is believed. It is acknowledged that bidders will be allowed to apply for three blocks and the deep water blocks are to be ear marked for independent operations from foreign companies but only joint ventures permitted for the remaining 11 shallow water blocks.
The winners will not be announced until 2014 which has raised some consternation within the foreign investment industry. As Myanmar is desperate for the financial gains such a tap into its natural resources will bring it is not sure why this process has been allocated such a long time. It is widely believed this may be because of the questionable past dealings between the nationalised oil industry and political co-operation at various times through Burma’s long established drilling enterprises.
While Myanmar is one of the poorest nations in the South East Asia region it is actually quite rich in natural energy resources. There is already a proven natural gas reserve of 7.8 trillion cubic feet ready for exploration according to BP’s annual global analysis findings. This is worth around $75 billion compared to the latest benchmark industry pointers as supplied by Bloomberg.
It is believed the share in earnings for the state owned infrastructure is likely to be between 60- 85% for oil and slightly less for gas returns. Whilst it is still open to speculation that these figures will be backed up in reality by such astronomical projections, the general view is that this time around the industry production will be directly benefiting Myanmar as a national on the whole and everyone, it seems, wants to be part of that.