YANGON—The state-run Myanmar Oil and Gas Enterprise signed agreements for gas production Monday with a joint venture that includes domestic company MPRL E&P Co., Woodside Energy from Australia and French energy giant Total.
The agreements cover production at offshore gas block A-6, which is located some 80 km west of Pathein Township in Ayeyarwady Region and has good prospects for commercial production, according to MPRL E&P Co.
Four exploration wells have been dug in the area and showed large gas deposits for commercial production, said MPRL E&P Co. executive director U Tint Swe.
"In the next stage, we will start production. We will dig production wells and produce natural gas," he said.
The joint venture plans to start commercial production on Dec. 31, 2023.
"The gas production at offshore blocks which the country currently relies on may decrease in 2023-24. The fact that we can develop the A-6 [block] for commercial production increases the potential of the country's energy sector," said U Tint Swe.
The A-6 block is the first commercially viable ultra-deepwater drilling project in Southeast Asia, according to a press release by MPRL E&P Co.
The productivity and quality of this ultra-deep water drilling may be better than other offshore blocks, but cost of production may be four or five times higher and there are technological challenges.
Myanmar Oil and Gas Enterprise director Daw Khin Khin Aye told The Irrawaddy that the gas produced from the A-6 block will be used mainly to supply gas-fired power plants in Myanmar.
She added that it is still too early to say if the A-6 block can make up for an expected decline in production at other gas fields such as Zawtika, Shwe and Yadana.
The Myanmar government and MPRL E&P signed a production-sharing agreement in 2007. MPRL E&P holds a 20 percent stake in block A6, while Woodside Energy and Total hold 40 percent each. Myanmar Oil and Gas Enterprise can reportedly take 15-20 percent of the gas once production begins.
Total has operated in Myanmar since 1993 and currently operates the Yadana offshore gas field.
"The government has long talked about the A-6 block as a potential site. If it is commercially viable to produce gas, it will be good for the country's electricity sector," electricity expert U Aye Kyaw Kyaw, the secretary of Yangon Region's Electricity Development Management Committee, told The Irrawaddy.
A retired official of Myanmar Oil and Gas Enterprise who requested anonymity said that A-6, unlike other oil and gas fields, is controlled by the government and will be used mainly to meet the electricity demand of the country.
The Ministry of Electricity and Energy has announced that it will invite tenders for exploration at 31 oil and gas blocks in early 2020. Myanmar has 51 offshore oil and gas blocks and 53 onshore blocks. Myanmar's military governments and U Thein Sein's administration issued tenders for 38 offshore blocks and 35 onshore blocks.
Total has operated in Myanmar since 1993 and currently operates the Yadana offshore gas field. The company has faced numerous allegations of complicity with abuses by Myanmar's military government and human rights abuses, including forced labor, related to the development of the Yadana pipeline.
Translated from Burmese by Thet Ko Ko