Southeast Asia's next frontier

July 7, 2014

Dockwise floatover installed the Shwe development topsides using COOEC's HSY229 installation launch barge. First production was in January this year. Photo from Dockwise.

Myanmar has been producing hydrocarbons longer than many. The country, sitting between India and China, exported its first barrel of oil from an onshore field in 1853.

Today, its hydrocarbon potential, especially offshore, is again attracting attention. After emerging from decades of sanction-driven isolation, due to military rule, the country is hoping to attract new investment in its upstream sector, especially offshore, where it lacks experience.

In January 2013, the Republic of the Union of Myanmar’s Ministry of Energy put 30 offshore blocks up for tender (19 deepwater and 11 shallow) in its 2013 Offshore Licensing Round. In March, preferred bidders on 20 of those blocks were announced.

The attraction for foreign investors is that Myanmar’s gas reserves have not yet been fully surveyed with modern seismic technology, making it an exciting and challenging country for exploration, says London-headquartered law firm Berwin Leighton Paisner.

“Myanmar has spent 50 years in isola- tion from the global economy,” says a World Economic Forum (WEF) report, New Energy Architecture: Myanmar, produced in collaboration with Accenture and the Asian Development Bank (ADB), and published mid-2013. “If the country continues its political and economic reforms, Myanmar has the potential to emerge as southeast Asia’s next frontier.”

Erling Vågnes, senior vice president for exploration in the Eastern hemisphere at Statoil, which was one of the winners in the 2013 offshore licensing round, says: “This is a large and virtually unexplored area in a basin with a proven petroleum system and thick sedimentary deposits. This is a long-term opportunity with high subsurface risk, but with high-impact potential.”

Myanmar wants to increase production to meet domestic requirements. Pre-2011, due to international sanctions, the government had limited access to finance, so it agreed to natural gas export con- tracts with Thailand and China, limiting domestic supply, the WEF says.

The country’s emergence from sanction-driven isolation could also reignite the potential for an LNG export project, similar to one backed by Japan and South Korea, but cancelled in 2007, suggests Berwin Leighton Paisner.

Offshore potential

According to the WEF report, Myanmar has 7.8Tcf proven natural gas reserves (BP Statistical Review of World Energy, 2012) and it exported about 303Bcf in 2011.

Dockwise floatover installed the Shwe development topsides using COOEC’s HYSY229 installation launch barge. First production was in January this year. Photo from Dockwise.

The Myanmar offshore can be geo- logically divided into three basins, according to a presentation by Zaw Min Aung, assistant executive geologist offshore, at state-owned Myanma Oil and Gas Enterprise (MOGE), which is responsible for the country’s upstream activities.

Aung was speaking at February’s Myanmar Oil and Gas Week in Yangoon. He said the three offshore basins are the Rakhine, Moattama, and Tanintharyi. The first offshore drilling was in 1965, in the Rakhine and Moattama. The first major discovery was the Yadana gas field in the Moattama area in 1980.

Existing projects

According to Aung’s presentation, there are 26 shallow water blocks and 25 deepwater blocks. Eighteen are active, operated by seven companies, under production sharing contracts. These are: Daewoo International (Blocks A-1, A-3, AD-7), MPRL E&P Pte (Block A-6), Petro Vietnam (M-2), PTT Exploration and Production International (PTTEPI) (Blocks M-3, M-11, M-9, MD-7, MD-8), Total E&P Myanmar (TEPM) (Blocks M-5, M-6), Petronas Carigali Myanmar Ltd.

An ACE Winches floatover installation package on board the S45 Barge for work to install the ZPQ platform offshore Yangon, Myanmar.

Southeast Asia

(PCML) (Blocks M12, 13 and 14), and CNPC (AD-1, AD-6, AD-8).

Existing production comes from the Yadana and Yetagun fields, which accounted for 95% of Myanmar’s total gas production in 2011 (ADB, Myanmar Energy Sector Initial Assessment, Manila, 2012). This year Shwe, operated by Korea’s Daewoo International, came on stream, exporting gas to China, with some domestic supply. Sawtika, operated by Thailand’s PTTEPI, is also due to come on stream this year. It will also export gas to Thailand, with some domestic supply.


Yadana, discovered in 1980 and in production from 1998, is in the Moattama offshore area, in Blocks M-5 and M-6. Reserves are esti- mated at 6.5Tcf, according to the Ministry. The facilities comprise three well head platforms, hous- ing 17 wells in total, with process, quarters, flare, and medium com- pression platforms (one each), con- nected to shore with a 216mi, 26in. pipeline. Partners on Yadana are Total (31.24%), UNOCAL (28.26%), PTTEPI (25.5%), MOGE (15%).


Yetagun, discovered in 1992, is in the Tanintharyi offshore area, in Blocks M-12, M-13 and M-14. Yetagun is Myanmar’s second largest gas field behind Yadana. Its reserves are estimated at 4.16Tcf, gas and condensate, according to the Ministry. Production started in 2000.

The facilities comprise a wellhead platform with 10 wells, processing platform, floating storage and offload- ing facility, compression platform and booster compression platform. A 126mi, 24in. pipeline is used for gas export. The partners are Petronas (40.75%), Nippon (19.4%), PTTEPI (19.4%) and MOGE (20.45%).


Shwe is in 110m water depth, in blocks A-1 and A-3, in the Rakhine offshore area, in the Bay of Bengal. Its reserves are estimated at 4.5Tcf. Offshore facili- ties comprise a processing platform with 11 wells, and the Mya-North subsea well head, with four wells. Gas export is via a 110km-long, 32in. pipeline.

First gas from Mya-North, part of the Shwe development, was in summer last year. On 16 January, operator Daewoo International announced first gas from Shwe, from the first of 11 production wells. Daily production was recorded at 200MMcf, this is due to increase to 500MMcf as the other wells come on stream.

Dockwise was the transport and installation contractor for the 22,000-tonne Shwe jacket, with distributed systems foundation, and 30,000-tonne topsides, constructed at Hyundai Heavy Industry’s fabrication yard in Ulsan, South Korea. Dockwise installed the topside through a floatover using COOEC’s HYSY229 instal- lation launch barge.

Myanmar’s on and offshore acreage.

Cable supplier JDR delivered a 13,650m-long production control umbilical for the Mya-North tieback, manufactured at JDR’s Sattahip, Thailand facility. FMC provided a subsea control system on the five-slot subsea manifold, in 186m water depth, 12km from the Shwe platform. In June last year, KCA Deutag secured a two year operating and maintenance drilling services contract for the Shwe platform with Daewoo International.

Partners on Shwe are Daewoo International (51%), ONGE (17%), GAIL (8.5%), KOGAS (8.5%), and MOGE (15%). According to a note by KDB Daewoo Securities, dated December 2013, Daewoo International plans to start exploring the AD-7 Block, in the Rakhine offshore area, in 2015. The note says: “If the block’s recoverable reserves are at least 3-4Tcf, a gas liquefaction plant may be built (or a piped natural gas facility if production is smaller).”


Zawtika is in the Moattama offshore area, in Block M-9 and a small part of M-11, in the Gulf of Martaban, in the Andaman Sea, about 300 km south of Yangon. The development, encapsulating the Zawtika, Kakonna, and Gawthaka gas and condensate fields, comprises three well head platforms, with a total 35 wells, an integrated processing and quarters platform (ZPQ), and a 230km-long, 29in. pipeline to shore for export. According to operator PTTEP, Zawtika will initially produce at 300MMcf/d.

Technip performed front end engineer- ing on the M-P project. Larsen & Toubro fabricated the wellhead platforms. The 16,500-tonne ZPQ topside was contracted to SMOE Pte in Singapore.

In Q4 last year, operator PTTEP completed a floatover installation of the ZPQ topside, performed by Saipem using the S45 barge, with an ACE Winches’ floatover installation package. PTTEP then started hook-up and commission- ing works, construction work of onshore pipeline and facilities, and a develop- ment drilling campaign. First gas of the Zawtika project was expected by the end of 2013, but is now expected this year. Partners on Zawtika are PTTEPI (80%) and MOGE (20%).

PTTEP said in January it plans to drill more appraisal wells on Zawtika and carry out exploration activities in Block M3, where a discovery has already been made and is earmarked for domestic supplies, according to a MOGE presenta- tion. “The company will also continue its exploration activities in M11, PSC G & EP 2 and MD-7 and MD-8 for possible future development,” PTTEPI said.

The future

Chevron, BG Group, Statoil, Woodside Energy, Shell, and ENI, were among the preferred bidders in the 2013 Offshore Licensing round, announced in March.

More than 60 proposals from 30 companies were submitted for the round, comprising 42 proposals for shallow water blocks and 22 proposals for deep water blocks.

Those selected were:In total, 30 production sharing con- tracts for offshore blocks had been due to be awarded in the round. In March, 20 shallow and deepwater blocks were offered, with ratification expected fol- lowing detailed agreements with the Ministry of Energy, and more blocks expected to be offered.

Statoil said its deepwater Block AD-10, awarded in 50/50 partnership with ConocoPhillips, covers more than 9000sq km, about 200km offshore, in about 2000m water depth. The award repre- sents a new country entry for Statoil, which now operates in 34 countries.

Statoil has committed to environmental and social impact studies and acquiring new 2D seismic during the first study period of 2.5 years. After this the partner- ship will decide whether or not to enter a three-year exploration period, the firm said.

BG Group and its bidding partners said it was committed to a 3D seismic acquisi- tion program in each block, expected to start in 2014/15, with options for future drilling.