Potential of Myanmar Upstream Energy Sector, What Could Be Done Better?

Abstract

The Myanmar hydrocarbon sector has made immense progress since sanctions were lifted in 2012. Gas production has remained stable since 2015 at approximately 1,900 MMcf/d (at early 2018), after increasing from just 1,300 MMcf/d in 2013. On the other hand, liquids production has declined around 10% each year over the same period. This is due to production decline of oil from old onshore fields and condensate from the offshore Yetagun field. Recent successful exploration and development likewise has concentrated in offshore areas, especially the Moattama Basin, Rakhine Basin and Mergui Terrace, where abundant gas reserves have been proven in Pliocene turbidites, Miocene carbonates and Miocene clastics. Offshore exploration results from 2015 to 2017 expanded the Pliocene turbidite play concept far south of the earlier Shwe discovery, with a 43% technical success rate for new-field wildcats. Onshore exploration drilling represented only about 24% of exploration wells in the same period, with no discoveries made. Several new-field wildcats were drilled in the Pyay Embayment and Salin Sub-basin to test the Oligocene to Middle Miocene clastic play but without success. Increased exploration drilling is expected in the short term, as major international oil companies and smaller independents complete drilling commitments or plan to further explore potential reserves. The onshore remains a target, with these planned activities until early 2019 spread almost equally in offshore and onshore basins. Several of the planned exploration wells will continue to target known plays. For example, Petronas is planning to drill two exploration wells in the offshore Yetagun Dev & Prod Area seeking to identify additional reserves to mitigate declining production. In the Moattama Basin, PTTEP is planning multiple exploration wells in the greater Zawtika area, potentially targeting untested fault blocks. Onshore in the Central Burma Basin, PTTEP also plans to drill four deeper wells in the MOGE 3 block where deeper potential has not been exploited. Woodside, after achieving mixed results in the deep water Rakhine Basin, is planning to drill at least one more wildcat and one appraisal well in the central part of the basin this year. Successful results here could support plans for a new development hub in the area. According to MPRL, the central/southern Rakhine Basin has a different turbidite system, derived from a “paleo-Irrawaddy” fluvial system, as opposed to the northern Rakhine that derives from the Ganges fluvial system. The government of Myanmar has taken a few initiatives to promote more investments. On 31 January 2018, four major LNG/Gas to power projects received a green light to proceed, with the government issuing the Notice To Proceed to the developers. These projects are situated along the coast of Myanmar, from the northern Rakhine state, to the central Ayeyarwady and Yangon regions, and to the southern coast of Tanintharyi region. The proposed building of offshore supply bases in the Mon State, Made Island in the Rakhine State, and/or in the Nga Yoke Kaung Bay area in Ayeyarwady Division will help promote future development in the national oil and gas industry. A government official has recently announced that initial steps has been taken to gather feedback for the purpose of reviewing and improving upstream fiscal terms and conditions, ensuring competitiveness with international practice and current market conditions, prior to the release of a new bidding round. This paper will review key recent exploration trends and will consider the potential impact of near-future plans to understand how further efforts by all stakeholders could benefit the national oil and gas sector for the longer term.

AAPG Datapages/Search and Discovery Article #90336 ©2018 AAPG Asia Pacific Region, The 4th AAPG/EAGE/MGS Myanmar Oil and Gas Conference, Myanmar: A Global Oil and Gas Hotspot: Unleashing the Petroleum Systems Potential, Yangon, Myanmar, November 13-15, 2018