YANGON –Indian oil company Essar will this year commence natural gas exploration at an inland block in Rakhine state, the Chinese news agency Xinhua reported last week.

Drilling will begin in Block-L, near the Rakhine capital Sittwe, under a production sharing contract signed with the Myanmar Oil and Gas Enterprise more than two years ago.

It is one of two blocks the Indian company has been permitted to explore under the 2005 agreement. Exploration in the other block, A-2, which lies off the Rakhine coast, will commence later.

Essar is one of several Indian companies engaged in oil and gas exploration in Myanmar. ONGC Videsh Ltd and the Gas Authority of India Ltd (GAIL) have stakes in the A-1 and A-3 blocks as part of a consortium led South Korea’s Daewoo International Corporation.

In September last year, ONGC signed separate production sharing contracts with Myanmar to explore natural gas in three deep-sea blocks – AD-2, AD-3 and AD-9 – in the Rakhine offshore area, according to an earlier official report.

Myanmar has an abundance of natural gas resources, particularly in offshore areas. With three large offshore and 19 onshore oil and gas fields, the country has proven recoverable reserves of 18.012 trillion cubic-feet (TCF) or 510 billion cubic-metres (BCM) out of total estimated reserves of 89.722 TCF or 2.54 trillion cubic-metres (TCM). Experts also said Myanmar has an estimated 3.2 billion barrels of recoverable crude oil reserves.

According to the Central Statistical Organisation, in the fiscal year 2006-07, Myanmar produced 7.707 million barrels of crude oil and 13.039 BCM of gas. Gas exports for the year totalled 13.028 BCM and brought in US$2.03 billion.
The latest figures indicate that in the first half (April-September) of the 2007-08 financial year, the country’s crude oil production amounted to 3.857 million barrels, while its gas output was 6.74 BCM. Gas exports amounted to 9.17 BCM during the period, earning $1.531 billion.

More statistics reveal that from 1988, when Myanmar opened itself to foreign investment, to the end of 2007, foreign investment in the oil and gas sector had reached $3.243 billion, spread across 85 projects. Only the electricity industry has seen more foreign investment.

Currently, 13 foreign oil companies, mainly from Australia, Britain, Canada, China, Indonesia, India, South Korea, Malaysia, Thailand and Russia, are involved in oil and gas projects in Myanmar, according to official sources.

– Xinhua