STAVANGER, Norway (Reuters) - The world’s biggest oil and gas firms want to explore in Myanmar as global sanctions ease and the country will soon launch an onshore and offshore exploration round, its energy minister said on Monday.
Myanmar could offer over 10 offshore and around 10 onshore blocks as one of the world’s poorest countries seeks to raise much needed revenue, Than Htay said an interview.
“Since the sanctions have been eased by the U.S., the UK, the western powers, the giant companies are interested; they come to my ministry daily to discuss how they could participate,” he said.
“Shell (RDSa.L) is inquiring, BG BG.L from the UK is also coming to discuss ... There are many giant firms coming.”
The minister’s comments were the closest indication yet about the size of the coming licensing round and the type of interest it was generating.
The tender would be the first opportunity in at least 15 years for U.S. oil firms to participate in Myanmar’s energy sector after Washington relaxed sanctions last month to allow for new investment.
Myanmar, one of the world’s first oil producers, has opened up with remarkable speed since a civilian government took office last year following nearly 50 years of military rule, releasing hundreds of political prisoners, permitting greater media freedom, legalizing protests and undertaking peace talks with ethnic rebel groups.
It also freed opposition leader and Noble Peace Prize laureate Aung San Suu Kyi from two decades of house arrest last year and permitted her this year to contest and win a seat in parliament.
Western powers responded by easing sanctions, hoping to encourage former general Thein Sein’s government to further dismantle authoritarian rule. The government is seeking to maximize earnings from oil and gas, its number one source of export income.
However, Suu Kyi, the daughter of Myanmar’s assassinated independence revolution hero Aung San, has warned big oil companies from working too closely with the state owned Myanma Oil and Gas Enterprise because of lack of transparency and accountability.
Than Htay brushed off the criticism saying Suu Kyi lacked insight, but he promised to revamp licensing round procedures before this year’s launch.
He said he planned to convene a meeting of interest groups, political leaders and industry professionals to iron out the rules after Western oil firms were conspicuously absent from last year’s energy tender.
“We’ll listen to their voice and ideas, and only after that meeting we’ll we decide how we’ll launch the coming tender; but we won’t take long,” he said.
Myanmar is still a relatively modest gas producer with 1.475 billion cubic feet of daily production, putting it in 36th place globally. But the lack of exploration work over its decades in political isolation make it an attractive investment target.
Western governments are also keen to see oil firms work there as a reward for its rare success in launching a peaceful transition.
Than Htay added that given the costs of exploration and production, Myanmar will continue to rely on oil giants in future tenders.
“The oil industry is a technology and capital intensive industry, but we are very poor so we need to seek foreign investment and we definitely need to collaborate with the international oil companies and need to seek their investment,” he said.
Editing by William Hardy