|The Yadana gas field in the Gulf of Mottama.
MYANMAR’S oil and gas sector is second only to hydro power as the country’s leading source of foreign direct investment (FDI) since the introduction of the market-oriented economy, according to the figures released by Myanma Investment Commission (MIC).
About US$3.24 billion of FDI had been pumped into the oil and gas sector up to November 2007, 22 percent of the country’s total FDI, which stood at $14.736 billion for the same period.
The $3.24 billion in foreign investment was spread across 85 oil and gas fields, both onshore and offshore, and included both exploration and production of energy resources.
Investment in the energy sector has shifted from traditional producers in the US and France to Asian multinationals, according to Dr Maung Aung, senior researcher and economist at the Economic Studies and Research Institute.
“In the past, the United States and France used to be key player of FDI in oil and gas sector. Now, multinational oil and gas companies from China and South Korea play an important role in Myanmar,” said Dr Maung Aung.
Myanma Oil and Gas Enterprise (MOGE) is the country’s sole operator of exploration and production of oil and gas. Twenty-one multinational oil and gas companies from 13 countries have been cooperating with MOGE in long terms contracts.
MOGE has contracts with multinationals such as Total from France; CNOOC and SNPC from China; Daewoo from South Korea; ONGC from India; Danford Equities from Australia and PTTEP from Thailand.
The wider energy sector – including hydro power, oil and gas – received 65pc of Myanmar’s total FDI, which was spread across 12 economic sectors: Power, energy, mining, manufacturing, hotels and tourism, livestock and
fisheries, transportation and telecommunications.
Dr Maung Aung said the increase in oil- and gas-directed FDI in Myanmar was partly based on increased demand for energy globally.
He said as global demand shows no signs of abating, FDI in the energy sector is expected to increase into the future as energy companies look for alternative sources.
The energy sector, which comprises oil and gas as well as hydropower, has been the primary recipient of FDI since Myanmar enacted the Foreign Direct Investment Law in late 1988, after adopting the market-oriented economic policy.