Bloomberg/Myanmar7 Jun 2013 09:54
We may just be ahead of the game here!
Myanmar’s opening to foreign investment has been compared to the fall of the Berlin Wall and the start of an economic growth story to emulate Vietnam. How those views pan out will be largely decided by natural gas. Exxon Mobil Corp. (XOM), Woodside Petroleum Ltd (WPL) and Oil India Ltd. (OINL) are among 59 global energy companies lining up for a share in Myanmar’s estimated $75 billion bounty of the fuel, according to country’s energy ministry. While oil and gas have been pumped for decades, investment largely dried up during almost five decades of military rule that ended in 2012.
Wedged between energy-hungry China and India, Myanmar needs more investment to explore its gas potential. Energy and industries such as agriculture need a combined $320 billion through 2030 to help the economy achieve 8 percent annual growth, a report last week by McKinsey Global Institute forecast.
“People see Myanmar as a frontier market,” Melinda Tun, a senior associate at law firm Baker & McKenzie, said in a June 4 phone interview in Sydney. “If you can get a first-mover advantage you could be well set for years to come. It sits between the two most populous economies in the world”
The nation’s transition to democracy in 2012 prompted the US to ease sanctions last May. Concerns about government transparency and ethnic violence persist among investors in Myanmar, which is hosting a three World Economic Forum on East Asia that concludes today.
France’s largest oil producer Total SA (FP), Italy’s biggest oil company Eni SpA (ENI) and India’s leading explorer Oil & Natural Gas Corp. (ONGC) have qualified to explore onshore fields. Investors seeking 30 offshore blocks in Myanmar, where gas is the biggest revenue earner, must lodge their statements of interest by June 14, the Government said in April.
“A lot of low-hanging fruit hasn’t been caught,” Olivia Boyd, a Beijing-based energy analyst at HIS Global Insight, said by phone. “A lot of prospective areas are unexplored.”
Korea Gas Corp. the worlds biggest LNG buyer, PTT Exploration & Production Pcl, Thailand’s biggest publicly traded exploration company, and Malaysia’s Petroliam National Bhd have also qualified to bid for the onshore blocks, according to Myanmar’s energy ministry.
Myanmar has 7.8 trillion cubic feet of proven natural gas reserves, according to BP plc data, worth about $75 billion at benchmark prices for gas futures traded in the UK.
The US Energy Information Administration estimates the country, also known as Burma, had 10 trillion cubic feet of proven reserves and produced 421 billion cubic feet of the fuel in 2011. The reserves are 1.9 percent of known deposits in the Asia Pacific, according to the EIA.
“The potential gas reserves could be much bigger than what is known,” Kumar said. “In
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