Interview: U Moe Myint
How has the recent withdrawal of sanctions on Myanmar affected the energy sector so far?
U MOE MYINT: The change has been nothing short of significant. Although the oil and gas industry is more than 100 years old, recent bids have proven that the global oil community is interested in Myanmar and that the government has increased measures to ensure transparent bidding. What this most importantly brings to the energy sector is access to technology. Take the US, which has the latest technology: it will go from a net importer to a net exporter of liquefied natural gas in the near future mainly because of shale gas fracking. Because of the lifting of sanctions, we too will be able to use these technologies. There are a lot of companies out there that want to be involved in Myanmar’s exploration and production. The likes of Baker Hughes, Halliburton and Dresser are but a few of the companies with an eye on proceedings. We are excited because we believe that with these technologies Myanmar’s economy will benefit from higher production.
What steps can international firms entering the country take to help develop local human resources?
MOE MYINT: There is tremendous opportunity for the young people of Myanmar who are looking for a career in the oil industry. One common article in production-sharing contracts states that wherever a local citizen or firm can do the job as well as a foreign individual or company, preference will be given to the firm or individual from Myanmar. That means that if they are qualified, they will get the job. International companies have to hire locals. Such talented individuals who are employed by international firms will also receive training. There should also be an increase in technological skills transfer and the training of Myanmar’s nationals as the level of activity in the sector increases. So the influx of foreign firms will naturally advance the human capital within the energy sector. The oil and gas industry is key and requires major incentives and investment to be able to fuel further development of the nation.
What sectors should be targeted to unlock the full potential of Myanmar’s oil and gas industry?
MOE MYINT: All along we have been talking about the oil and gas sector only. What we are talking about now is a virtual energy company. We do not want to be locked into just oil and gas. Now we have a discovery that is still marginal, so development cannot be justified. However, we are now undertaking additional 3G seismic surveys, and Australia’s Woodside Petroleum has taken up a 50% participating interest in the block so that we are no longer taking this on alone. Since we have covered all costs up to this point, Woodside will cover all forward costs until we decide to drill. We believe there is an enormous potential, maybe up to 10trn cu feet of gas, but we will not know that until we drill. If we make a big discovery, the question will be what do we do with all this gas. We are thinking that instead of just selling gas, we may use our gas supply to generate power for the grid or to sell to industrial estates. In this way, we will be a virtual energy company and produce our own power from our exploration activities; that production is fed into your own power generation plant, which distributes, supplies or sells power to the end user. This is referred to as independent power production and is what the country needs.
How will the auction of offshore blocks help overcome the local deficit of energy?
MOE MYINT: Even though Myanmar has proven reserves, previous sanctions have meant that it remains unexplored. Now that sanctions have been lifted, this is an area that many oil companies would like to explore.
There is potential for major oil and gas fields; the only issue is that the period from exploration to discovery and all the way up to production can take anywhere between seven and 10 years. So these are all long-term projects. If any company is successful and if there are more discoveries, you can expect production 10 years from now. So the real question is how to address the problem of energy supply before production begins.
