SHELL and Mitsui Oil Exploration, Eni and PetroVietnam and BG Group and Australia’s Woodside Energy have formally taken stakes in blocks offshore Myanmar after signing production sharing contracts (PSCs).
In its announcement, Woodside said the PSCs covering offshore blocks AD 2, AD 5, A 4 and A 7 made it the largest acreage holder in Myanmar’s Rakhine basin – in the Bay of Bengal.
With exploration activities already underway in offshore blocks A-6 and AD-7, Woodside now holds interests in six different permits covering a combined area of 46,000 square kilometres, it said.
Woodside’s executive vice president of global exploration, Phil Loader, said Woodside planned to start an active program of exploration in the region in 2015 and beyond.
“The Rakhine basin is an emerging oil and gas province that fits very well with Woodside’s proven capabilities in deepwater exploration and development,” Mr Loader said.
The company holds operated equity interests of 55 per cent and 45% respectively in offshore blocks AD 5 and A 7, located in the southern Rakhine basin.
BG Exploration & Production holds the non-operating 45% stakes in both permits, while Myanmar Petroleum Exploration & Production (MPEP) holds the remaining 10% in A 7.
In turn, BG Group holds a 55% operating stake in AD 2 and a 45% operating stake in A 4, with Woodside holding 45% stakes in both, while the remaining 10% in A 7 is held by MPEP.
In its announcement, Woodside said execution of the PSC authorised it to begin exploration work in the blocks, subject to preliminary environmental approvals.
BG Group said it would carry out an environmental and social impact assessment ahead of planning a geophysical and geological data acquisition campaign that will include 3D seismic acquisition in each block.
This exploration work is expected to begin in 2015, with plans beyond that for initial drilling.
Chevron subsidiary Unocal Myanmar Offshore will hold a 99% operating stake in block A5, also in the Rakhine basin, with Myanmar company Royal Marine Engineering Co (RME) holding the remaining 1%.
Block A5 is 200 kilometres offshore northwest Yangon and covers more than 1 million hectares
In addition to Block A5, Chevron has a 28.3% non-operated interest in a PSC for the production of natural gas from the Yadana and Sein fields, within Blocks M5 and M6, in the Andaman Sea.
The company also has a 28.3% non-operated interest in a pipeline company that transports most of the natural gas to the Myanmar-Thailand boarder for delivery to power plants in Thailand. The remaining volumes are dedicated to the Myanmar market.
Italy’s Eni signed two PSCs for offshore blocks MD-02 and MD-04, in which it holds 80% operating stakes, with the remaining 20% held by Petrovietnam Exploration Production Corporation.
Also located in the Rakhine basin, the MD-2 block covers an area of 10,330 square kilometres in water depths ranging from 500 to 2400 metres.
MD-4 Block is in the Moattama-South Andaman basin, about 230 kilometres from the coast, west of the Yetagun gas field.
The block covers an area of 5,900 square kilometres in water depths ranging from 1,500 to 2,200 metres.
Eni chief executive Claudio Descalzi said the contracts saw the company further its growth strategy in South East Asia.
The contracts for the two blocks foresee a study period of two years, followed by an exploration period of six years, subdivided in three phases.
India’s Reliance Industries signed production sharing contracts for offshore blocks M17 and M18 in the Tanintharyi basin, offshore Myanmar, covering a combined 27,600 square kilometres in water depths of up to 3,000 metres.
Reliance will be the operator of the blocks with a 96% participating interest. United National Resources Development Services Co. Ltd. (UNRD), a Myanmar company, will hold the remaining interest in the block.
At the same time, Shell was awarded a 90% stake in AD-9, AD-11, and MD-5, deepwater blocks offshore Myanmar – with the remaining 10% participating interest in each block held by Mitsui Oil Exploration.
In an announcement, Mitsui said its win reflected its aim of establishing a more solid business foundation for further growth through continuous exploration and acquisition activities in South-East Asia and across the world.