Yetagun project in the Gulf of Mottama is a multinational investment generating hundreds of millions of dollars. Pic: Smart Technical Services

While FDI has traditionally flowed in from neighbouring countries like China, India and Thailand, in recent years investment funds have also poured in from places like Malaysia, Australia and Russia.

According to a Myanmar Investment Commission (MIC) report, FDI in the oil and gas sector reached nearly US$2.635 billion in 2006; 19.7 percent of the $13.816 billion of FDI invested during that year.

U Kyaw Kyaw Hlaing, managing director of Smart Technical Services Co Ltd, said more FDI would enter Myanmar’s energy sector because of the country’s potential oil and gas reserves and skyrocketing demand for both commodities worldwide.

He said the development of two newly discovered offshore gas reserves off the Rakhine coast and the Gulf of Mottama would boost FDI in the country.

“Daewoo and PTTEP both have to build platforms and pipelines to transport the gas from the A-1, A-3 and M-9 blocks. This kind of infrastructure investment will certainly boost FDI for the next two or three years at least,” he said.

“I’m sure more oil and gas reserves can be found if we do more aggressive explorations, including drilling many exploratory wells in both onshore and offshore blocks,” he said.

In recent years Myanmar has awarded many onshore blocks to oil companies from China, India, Malaysia, Russia and Australia.

Myanma Oil and Gas Enterprise figures show four deepwater, three shallow offshore blocks and one onshore block were awarded to international oil companies since January 2007.

The figure is significant when compared with the January to March period in 2006, when MOGE did not grant any oil blocks to foreign companies.

Foreign countries investing in Myanmar’s oil and gas sector include China, India, Malaysia, South Korea, Thailand, Singapore, Switzerland, Russia, Australia and the United States.

With the declaration of the Union of Myanmar Foreign Investment Law in 1988, Myanmar demarcated 47 onshore and 25 offshore blocks in the Rakhine, Mottama and Tanintharyi areas and invited foreign oil companies to invest in Myanmar’s petroleum sector.

Of the 25 offshore blocks, 18 are located in the Mottama and Tanintharyi offshore areas, while the final seven are in the Rakhine region. In 2006 the government opened up an additional18 deepwater blocks, 10 of which are in the Rakhine area, with the other eight in the Mottama Gulf.