Myanmar

Basic Facts:

Government: Military Regime

GDP: $ 56.92 billion (2009 est.)

GDP Composition: 43.1 % Agriculture, 19.8 % Industry, 37.1 % Services

GDP Growth rate: 1.8 % (2009 est.)

Revenues: $ 1.18 million

Expenditures: $ 2.432 million (2009 est.)

Industry Product: agricultural processing; wood and wood products; copper, tin[1]

Maps: Please click on the map to enlarge:

Extractive industries: brief overview:

Commercial energy use in Myanmar was constrained by both supply and demand factors in the second half of the twentieth century and the associated industries such as coal, oil and electricity played a relatively minor role in the nation’s economic growth since independence in 1948. Realizing the importance of energy in modernization and economic development, the Socialist regime formed the Ministry of Energy (MOE) in 1985. The MOE was tasked to oversee offshore oil and gas exploration and development (on a production-sharing basis with foreign oil companies) that apparently held some promise of a major gas find. When the military regime that assumed power in September 1988 decided to liberalize the state-controlled command economy by introducing market-oriented reforms and allowing foreign direct investment (FDI) in many economic sectors, the pent-up demand for commercial energy rapidly increased. Then the MOE was reconstituted in 1989 with one department (Energy Planning Department) and three state-owned enterprises, viz., Myanmar oil and Gas Enterprise (MOGE), Myanmar Petrochemical Enterprise (MPE) and Myanmar Petroleum Products Enterprise (MPPE). A new Ministry of Electric Power (MEP) was instituted in November 1997 to promote and effectively operate the power sector. The MEP comprises the Myanmar Electric Power Enterprise (MEPE, Myanmar’s only electricity utility) and a planning and support department called the Department of Electric Power.

Oil and Gas

Many of Myanmar’s onshore oil fields, after yielding over 300 million barrels, are now severely depleted and only three of the six new fields discovered since 1991 are currently producing crude oil regularly.[3] Nevertheless, MOGE claimed to have discovered some 3.15 billion recoverable reserves of crude oil (onshore and offshore) by the end of 2002.[4]

The official estimate of (ultimately) recoverable natural gas reserves, according to data released by MOGE in April 2002, was nearly 51 tcf (trillion cubic feet) or 1.4 billion cubic metres (ibid.) owing to the discovery of two large offshore fields in the southeastern coast (opposite Thailand) and a potentially larger one further west (opposite Bangladesh).

Since 1989, the government has been soliciting FDI and foreign technical inputs to rehabilitate the existing onshore oil fields and to explore and develop new onshore and offshore oil deposits. Altogether 46 onshore blocks and 24 offshore blocks have been apportioned in this respect. By November 2001, 21 foreign companies had signed 33 contracts with MOGE to work on onshore fields. In early 2002, 9 companies working in 14 areas were still operating, while 21 EP, four RSF and two IOR blocks remained open for bidding.16 Their operations seem to have reversed the downward trend in recent years (see Table 1). A recent foreign joint venture in onshore oil development is between China’s Dian-Qian-Gui Petroleum Exploration Bureau of SINPOEC and MOGE who signed a production-sharing contract (PSC) to exploit onshore Block D in central Myanmar in early September 2004.17 Energy officials expected that the aforementioned efforts would increase onshore oil production from around 12,000 barrels/day to 20,000 barrels/day in the near future and eventually to meet the estimated demand of some 40,000 barrels/day with the help of offshore condensate oil and discovery of new fields.

The first offshore gas project to be developed in Myanmar named Yadana (jewel) encompassing M-5 and M-6 blocks off Moattama cost US$1.2 billion, with reserves of the order of 6.5 tcf. It began exporting gas to Thailand in 1988 via a 255mile (36-inch diameter) pipeline to the tune of 525 mmcfd (million cubic feet per day). Myanmar also receives 125 mmcfd of its output.

The second offshore project to come on stream at a cost of about US$700 million is the Yetagun (Valiant Banner) off the Tanintharyi coast in southeastern Myanmar. The project constitutes blocks M-12, M-13, and M-14 with reserves estimated at 3.2 tcf. Exports to Thailand started in 2000 through a 169-mile (24-inch diameter) pipeline at the rate of 200 mmcfd eventually rising to 300 mmcfd if there is demand. It could produces 8-9,000 barrels per day of gas condensate as well. Yadana and Yetagun gas pipeline in eastern Burma are currently the largest single source of income for the junta. The project provides a valuable case.[2]

The third PSC with Daewoo International of Korea for exploration in Block A-1 off the Rakhine coast opposite Bangladesh made news when MOGE announced on 15 January 2004 that a “world class commercial gas deposit” was discovered. It was also revealed that a consortium formed with Daewoo (60 per cent), Korea Gas Corporation (10 per cent), and two Indian firms ONGC Videsh (a subsidiary of oil and Natural Gas Corporation, 20 per cent) and Gail (India) (Gas Authority of India, 10 per cent), would develop the gas field with a potential yield of 4.2 tcf to 5.8 tcf.22 In February, Daewoo upped the ante by holding a news conference in Seoul in which it was predicted that the project now named “Shwe” (gold) could yield, for the company, annual net profits of some US$86 million for 20 years beginning 2010. It was also speculated that Myanmar’s takings could rise from US$800 million to several billion annually. In the following months excited Indian industrial circles mooted several schemes for utilizing that giant gas field to satisfy India’s huge appetite for energy and this further fuelled speculation. Liquefied Natural Gas (LNG) plants, Liquefied Petroleum Gas (LPG) plants, new onshore infrastructures, pipelines across Bangladesh or other routes were some of the projects discussed publicly and privately, despite the fact that up to the end of 2004 only one test well had yielded substantial output of 32 mmcfd.24 On 13 January 2005, after a two-day tri-nation meeting of energy ministers from Myanmar, India and Bangladesh in Myanmar’s capital Yangon, a memorandum of understanding (MoU) was signed with all parties pledging to cooperate in a project to pipe M-l’s natural gas output to India across Bangladesh.25 While, by January 2005,. two test wells had been drilled and a planned series of six test wells had begun on the third one, it remains to be seen whether the speculation that the field’s potential yield could go up to double digits of tcf with future extension of drilling area would actualize. Meanwhile, in October 2004, Daewoo sold 30 per cent of its stake in A-3, which is adjacent to A-1, to its two Indian partners of the A-1 project.

Coal

Myanmar’s coal deposits are of lower quality than the standard anthracite with the majority classified as sub-bituminous. A small amount of lignite deposits are also present. Myanmar’s mines ministry claimed to have discovered a total of some 258 million tons of coal deposits by 2001. A major project to utilize coal from a deposit at Tigyit in Southern Shan State for producing electricity was undertaken by MEPE in mid-2001. The China National Heavy Machinery Corporation (CHMC) won the tender for supplying the 120-megawatt (twin turbine) power plant with nearly US$43 million worth of equipment. A consortium, formed in July 2002 of four local companies led by the Shan Yoma Nagar Company, secured the 20-year contract to exploit the Tigyit deposit (estimated at 20.7 million tons). It will supply 750,000 tons of coal annually as fuel for the power plant with technical expertise and equipment (equipment US$4.3 million) provided by CHNC. The project, reportedly more than half completed in late 2003, was slated to feed power into the national grid.[3]

Government body :

A new Ministry of Electric Power (MEP), The MEP comprises the Myanmar Electric Power Enterprise (MEPE, Myanmar’s only electricity utility) and a planning and support department called the Department of Electric Power.

National company :

Myanmar oil and Gas Enterprise (MOGE), Myanmar Petrochemical Enterprise (MPE) and Myanmar Petroleum Products Enterprise (MPPE).

External company:

Myanmar, Daewoo, PTT-EP, China National Offshore Oil Corporation, China National Petrochemical Corporation, Essar, Gail and Rimbunam (Malaysia) ONGC (India), Silver Wave Energy, Danford Equities (Australia), Sun Itera Oil & Gas (Russia)


[1] CIA Worldfact

[2] TOTAL Oil: fuelling the oppression in Burma, The Burma Campaign UK, p.6, accessed from http://www.burmacampaign.org.uk/PDFs/total%20report.pdf

[3] Tin Maung Maung Than, “Banking on Natural Gas” in Southeast Asian Affairs 2005

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