Energy majors BG Group and Woodside to invest $1.1 bn in Myanmar

British oil and gas giant BG Group Plc and Australian energy major Woodside Energy Ltd will invest up to $1.1 billion in oil and gas exploration in Myanmar, an energy ministry official said yesterday.

The companies were the winners of an auction of four offshore blocks comprising two shallow water and two deepwater blocks, held last year by the government of Myanmar.

The four blocks AD-2, AD-5, A-4 and A-7 are located in the Rakhine Basin in the Bay of Bengal, off the coast of Myanmar's western Rakhine state.

According to the official, the investment in the shallow blocks A-4 and A-7 will be approximately $545 million while the deepwater blocks AD-2 and AD-5 will cost $535 million and the projects will take around seven to eight years to complete.

Over the weekend, the companies signed a production-sharing agreement, which authorises Woodside to commence the exploration programme subject to environmental approvals.

Woodside is the operator of blocks AD-5 and AD-7 in the southern part of the basin with 55 per cent 45 per cent interests respectively. BG Group and Myanmar Petroleum Exploration & Production Co Ltd (MPECL) hold non-operating interests in the blocks.

Besides, Woodside holds 45 per cent non-operating interest in both AD-2 and A-4 blocks in the northern Rakhine Basin, where BG Group is the operator. MPECL also holds non-operating interests in these blocks.

Woodside is the largest acreage holder in the Rakhine Basin with 46,000 sq km including its two already operating blocks A-6 and AD-7.

According to Woodside's executive vice president global exploration Phil Loader, the company plans an active exploration programme in 2015 and beyond.

''The Rakhine Basin is an emerging oil and gas province that fits very well with Woodside's proven capabilities in deepwater exploration and development,'' Loader said.

Myanmar's proven natural gas reserves stand at 10 trillion cubic feet as at the end of 2013, according to BP's figures. Neighbour Thailand is a major consumer of Myanmar's natural gas relying for a fifth of its total requirement.

The country's oil and gas sector attracted $2.6 billion, or about 40 per cent of the total foreign investment of $6.6 billion during the 9 months to December, according to Myanmar's statistical organization.