summary of recent oil and gas conference in yangon november
TRANSCRIPT
Myanmar – status and outlook
Summary of recent oil and gas conference in Yangon November 2014 Willy H Olsen
• Deepwater Myanmar has attracted some of the worlds top explorers and many proven deepwater players
• How fast can they move?
• It was the theme for several presentations during the three days
• Final contracts for the award of blocks to be signed soon..
• The conclusions on timing seemed to be:
• EIA/SIA Seismic 2015
• Drilling Shallow Water 2017
• Drilling Deep Water 2018
• Minimum 5 years of activities for exploration
Ministry of Energy focus areas
Shale, refining and privatization
“We are doing our best with optimized efforts to conduct responsible business with international norm in the country.
Especially, we preserve the natural environment while doing business particularly in oil and gas sector which can threat the environment by undesirable impacts”
U Aung Myat Soe
Deputy General Manager
Ministry of Energy
Yangon, 27 October 2014
• The Ministry of Energy is preparing a study for unconventional exploration such as shale gas, shale oil and tight sands.
• Myanmar will purchase 50,000 barrels of crude oil per day after construction of Myanmar-China oil pipeline is finished
• The Ministry is preparing to build a mega size refinery • Location and design not yet decided.
• The Ministry is going to introduce privatization and diversification for energy business.
• Not only the refineries but also the other energy related fields are to be operated by joint ventures with interested parties.
Ministry of Energy focus areas
Shale, refining and privatization
• Myanmar will auction nine offshore oil and gas blocks for exploration next year
• Four shallow and five deep water blocks will be available ‘
• 65 % of the shallow blocks have proven hydrocarbons
• The deep water blocks are unproven,
• MOGE has done some exploration but did not have the right technology to assess how much oil there is
Than Tun, director (offshore) of MOGE.
More blocks on offer
New licensing round planned next year
• Existing projects:
• Yadana: Exporting gas to Thailand since 1998
• Yetagun: Exporting gas to Thailand since 2000
• Shwe: Exporting gas to China and domestic use since 2013
• Zawtika: Exporting gas to Thailand and domestic use since August 2014
• Future project:
• Block M-3: New discovery
Myanmar – the gas exporter
The existing and future projects
• Total plans to drill an exploration well at Yadana next year
• Petronas "needs to do more exploration and maintenance" at Yetagun
• PTTEP is drilling 10 appraisal wells at Zawtika
• Undertaking more exploration and appraisal work on M-3
• The Aung Sinkha discovery is just north of Yadana
• Plans to start development in 2016
More drilling planned next year
PTTEP planning to develop new discovery
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Myanmar – the economy
Continuous GDP growth
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Myanmar – the economy
Foreign direct investment has stagnated
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Myanmar – the economy
The export value of natural gas
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Gas consumption in 2013
Power Industry Transport Feedstock Other
Gas consumption in 2013
Most of the gas used in power sector
Offshore Onshore
Operating 19 blocks
Recent awards 16 blocks
Open 10 blocks
Open 11 blocks Operating
20 blocks
Recent awards 20 blocks
Myanmar – the oil and gas sector
The blocks onshore and offshore
Myanmar – the oil and gas sector
The number of wells drilled in recent years
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1. Daewoo Int'l Corp A1, A3, AD7 Shwe field
2. MPRL A6
3. CNPC AD1, 6, 8
4. PetroVietnam M2
5. PTTEP M3, 9, 11 Zawtika field
6. PTTEP MD-7, MD-8
7. Total E&P M5, M6 Yatana field
8. Petronas M12, 13, 14 Yetagun field
Myanmar – the oil and gas sector
The operators in the offshore sector
Offshore operations impacted by: Tropical cyclones and depressions Monsoon conditions
1. A-4 BG/Woodside
2. A-5 Chevron
3. A-7 Woodside
4. M-4 Oil India
5. M-7 ROC Oil Co.
6. M-8 Berlanga
7. M-15 Transcontinental
8. M-17 Reliance
9. M-18 Reliance
10. YEB Oil India
Myanmar – shallow water blocks
Waiting for the final signatures
1. AD-2 BG Exploration
2. AD-3 Ophir Energy
3. AD-5 Woodside
4. AD-9 Shell
5. AD-10 Statoil
6. AD-11 Shell
7. MD-2 Eni
8. MD-4 Eni
9. MD-5 Shell
10. YWB Total E&P
Shallow water Deep water
• Total is operator for the M5-M6 Joint Venture
• Total’s national staff development • 332 permanent employed – 735 contracted staff
• Myanmar nationals : ~90% of staff
• 13 Myanmar nationals in international assignment
• Training • Approx. 3,000 man-days of training annually
• Technical Training Center for operators & technicians
• 115 Million USD invested in training for 150 technicians & engineers since 1995
• Employee dialogue • Staff representatives - last election held in May 2014
Total in Myanmar
Most of the employees are local
• Woodside is poised to become the Rakhine Basin’s largest acreage holder
• Farm-ins to AD-7 and A-6 early 2013
• Four blocks awarded in offshore bid round; two as operator
• Two next generation 3D’s acquired within first year in country
• Woodside has shot over 3,000 sq km of 3D seismic
• First well planned Q4 2015
• Rakhine Basin – much to learn, early signs promising. • Working petroleum systems, geological complexity.
• Challenges exist, but can be mitigated.
• Opportunities for cooperation.
Woodside in Myanmar
Building a significant position
• BG Group provisionally awarded four blocks
• Large blocks in frontier basin
• Several play types
• Significant challenges associated with exploration in deepwater: • Technical, schedule and cost
• The partnership
• BG/Woodside/MPRL
• Comprehensive work program planned
• Large seismic programs
• Accelerated technical evaluation
• Gas is expected to fuel the future growth of Myanmar’s economy
BG in Myanmar
Comprehensive work program
• Awarded Block AD-03 in the deep-water Rakhine Basin
• Partnership with Myanmar company, Parami Energy
• Initial study period to re-process 2D seismic and acquire 3D seismic data
• Yangon office to be opened Q4 2014
• Acquire 3D seismic as soon after PSC signing as possible
• Asset Manager in-country
• Ophir’s cornerstone asset in South East Asia
• Ophir has expanded in recent years in Tanzania, Equatorial Guinea and recently in Indonesia
Ophir in Myanmar
Ready to moved when the PSC is signed
• GoldPetrol IOR-2 Chauk oil field since 1900
• GoldPetrol MOGE-1 Yenangyaung oil field
• SINOPEC PSC-D Mahudaung
• Nobel Oil PSC-A Hukawng
• Nobel Oil PSC B-1 Uyu
• Nobel Oil PSC-E Myingyan
• PTTEP PSC-G Taungdwinggyi
• PTTEP EP-2 Aunglan
• PTTEP MOGE-3 Padaukpin-Natmi
• ENI B.V K Yamethin
• ENI RSF-5 Ondwe
• ONGC B-2 Zebyutaung-Nandaw
• ONGC EP-3 Thegon-Shwegu
• Petronas IOR-5 Htantabin
• Petronas IOR-7 ShwePyiTha
Myanmar – the onshore fields
Wide range of companies involved
• MPRL E&P MOGE-2 Mann oil field
• MPRL IOR-4 Pyay
• MPRL IOR-6 Myanaung
• NPCC PSC-F Ngahlaingtwin
• SNOG PSC-R Mepale
• GeoPetrol RSF-9 Pyalo-Paukkhaung
• PCM Inc RSF-2 Tuyintaung-Myaing(S)
• PCM Inc SF-3 Gwegyo-Ngashandaung
• Jubilant PSC-I Hinthada
• Istech Energy EP-5 Inbin-Tegyigon
• Bashneft EP-4 Mayaman
• Pacific Hunt C-1 Yenan-Indaw
• Pacific Hunt PSC-H Taungoo-Pyinmana
• Brunei NOC EP-1 Kyaukkyi-Mindon
• CAOG MOGE-4 Myinthar
Myanmar – the onshore fields
Many smaller companies involved
The energy management committee
Many ministries have a role to play
• The following ministries are designated as responsible focal points for different energy sectors:
• Oil & Gas (Ministry of Energy)
• Electric Power (Ministry of Electric Power)
• Coal ( Ministry of Mines)
• Firewood/Charcoal (Ministry of Forestry)
• Renewable Energy (Ministry of Science & Technology)
• Energy Efficiency & Conservation (Ministry of Industry)
• Nuclear Energy (Ministry of Science & Technology)
• The overall focal point representing Myanmar energy sector in the ASEAN Energy Program is the Ministry of Energy
• Oil companies shall endeavor to employ qualified Myanmar citizens in accordance with the Foreign Investment Law, rules and regulation of the Republic of the Union of Myanmar.
• They shall submit a staffing plan for the development and production operations at all levels up to the management level
• The employment of Myanmar nationals shall be reviewed from time to time by the Management Committee
• Give preference to goods and services which are available in Myanmar or rendered by Myanmar nationals approved by MOGE
Employment of local people
Preference for local goods and services
• Myanmar Centre for Responsible Business has interviewed and profiled over 1,200 SMEs across 25 sectors;
• Produced 200 matchmaking reports including over 500 unique SMEs for 40 buyers
• Facilitated 130 contracts for a total value of US $11m;
• Conducted 50 training sessions for over 250 businesses (960 individual attendants);
• Disseminated 2,500 tenders on myanmar-opportunities.org;
• Held more than 60 meetings with aid organizations and procurement officer
• The Centre is a joint initiative of the Institute for Human Rights and Business and the Danish Institute for Human Rights
Denmark is funding a major program
Encouraging responsible business
Vicky Bowman Director, Myanmar Centre for Responsible Business
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60 The Ministry of Science and Technology is responsible for conducting engineering education and vocational training in Myanmar
Source: U Win Khaing, President Myanmar Engineering Society
Huge need for education
Limited number of professional engineers
• Myanmar understand the need and gives priority for the development of it's human resources
• The importance of human capital and the value of knowledge, skills and experience are recognized at the very top level
• Myanmar understand the present limited human resources available and expectations from the international companies interested to invest in Myanmar
• Myanmar understand the need to develop the middle management level in all sectors of the economy
• Some companies are sending Myanmar engineers and workers for training at their home manufacturing plants
Leadership understand the limited capacity
Development of human resources critical
• Many Myanmar academia and government staff are sent for training overseas
• Many Myanmar young people are studying at many overseas universities
• The government has established an overseas scholarship fund to support students to study abroad
• The new National Education Policy will enhance the capacity and capability of the universities and technical & vocational schools to produce much needed qualified engineers and technicians as per industry demand and requirements
• Many Myanmar skilled and other semi-skilled workers are working overseas and form a potential huge trained labour force
Leadership understand the limited capacity
Supporting students sent for training