Thu 31 Jul 2014
Filed under: Business / Trade,News
Myanma Oil and Gas Enterprise (MOGE) signed contracts for four onshore blocks after several months’ delay on July 30, according to a statement from the ministry.
The four contracts are the first of the ten production sharing contracts (PSCs) and three improved petroleum recovery contracts that need to be signed before exploration can begin on the blocks.
The Ministry of Energy held a tender for 16 onshore blocks, with the winners announced in October 2013. However, the agreements needed to be signed before exploration and production could begin on the blocks.
State-owned MOGE finally inked four of the much-delayed agreements on July 30. Two of the agreements were improved petroleum recovery contracts with British Virgin Island-registered MPRL E&P and Myanmar Petroleum Exploration and Production (MPEP), which are both part-owned by prominent Myanmar oil and gas businessperson U Moe Myint. The two other signed agreements are production sharing agreements with Italian firm Eni.
MPEP is Eni’s local partner in two blocks.
The companies must now conduct environmental and social impact assessments in their respective blocks within six months, the statement said. The firms also need Myanmar Investment Commission approval after completing the assessments.
“The companies will cooperate with local authorities to develop the regions,” MOGE’s statement said.
MPRL chief executive officer U Moe Myint welcomed the signing of the contracts in a follow-up statement. He said: “The award and signing of Blocks IOR-4 and IOR-6 now enable us to further leverage our 18 year track record of rehabilitating mature fields in Myanmar.”
MPRL will conduct a number of activities in the next twelve months, including pilot programs in enhanced oil recovery, production acceleration and further exploration drilling activities, as well as beginning environmental and social impact assessments.
MPRL has managed the Mann field since 1996 in a joint venture with MOGE.
MOGE will also receive $26.01 million after having the four agreements signed, the ministry statement said.
MOGE will have the right to purchase 15 to 25pc of the share for each block when production starts. Another 5pc of production will be transferred to MOGE as research and development fee according to the contract, with Myanmar receiving 83pc of profit from every onshore block in the production stage.
Eni officials did not immediately return request for comment.