June 20, 2008

China, Burma, Daewoo Consortium Sign Gas Pact

Text of report in English by official Chinese news agency Xinhua (New China News Agency)

[Xinhua: "China, Myanmar, Daewoo Consortium Sign Gas Pacts in Myanmar"]

NAY PYI TAW, Myanmar June 20 (Xinhua) - The China National Petroleum Corporation (CNPC), Myanmar and a consortium, led by the Daewoo International Group Corporation, signed a memorandum of understanding (MoU) in Nay Pyi Taw Friday on sale and transport of natural gas from the offshore blocks A-1 and A-3.

The Daewoo consortium comprises South Korea Gas Corporation and India's ONGC Videsh Ltd and Gas Authority of India Ltd. (GAIL).

The three parties also inked an agreement on launching joint feasibility study on onshore natural gas pipeline involving six companies of China, Myanmar South Korea and India, and an agreement contract on entrusting the planning department of the CNPC by the six companies to implement the feasibility study.

The signing ceremony was witnessed by Myanmar Foreign Minister U Nyan Win, Chinese Ambassador Guan Mu, South Korean Ambassador Park Key-Chong and other Myanmar ministers. They expressed support and concern over the project representing the four countries.

The signing of the MoU signified the overall launching of cooperation in natural gas project between Myanmar and the four countries, officials said.

Natural gas deposits were found at block A-1 (Shwe field and Shwephyu field) and block A-3 (Mya field) in the Rakhine offshore area in January 2004 and April 2005 respectively, explored by the consortium of oil companies led by Daewoo with 60 per cent-stake. Other companies go to South Korea Gas Corporation (10 per cent), ONGC Videsh Ltd of India (20 per cent) and GAIL (10 per cent).

The Shwe field holds a gas reserve of 4 to 6 trillion cubic-feet (TCF) or 113.2 to 170 billion cubic-meters (BCM), while the Shwephyu 5 TCF and the Mya 2 TCF with a combined proven reserve of 5.7 to 10 TCF of gas being estimated by experts.

Myanmar has abundance of natural gas resources especially in the offshore areas. With three main large offshore oil and gas fields and 19 onshore ones, Myanmar has proven recoverable reserve of 18.012 TCF (510 BCM) out of 89.722 TCF (2.54 TCM) 's estimated reserve of offshore and onshore gas, experts said, adding that the country is also estimated to have 3.2 billion barrels of recoverable crude oil reserve.

According to the Central Statistical Organization, in the fiscal year 2006-07, Myanmar produced 7.707 million barrels of crude oil and 13.039 BCM of gas. Gas export during the year went to 13.028 BCM, gaining 2.03 billion US dollars.

The latest figures indicate that in the first half of 2007-08, the country's crude oil production amounted to 3.857 million barrels, while its gas output 6.74 BCM. Gas export was registered at 9.17 BCM during the period, obtaining 1.531 billion dollars.

More statistics reveal that foreign investment in Myanmar's oil and gas sector had reached 3.243 billion dollars in 85 projects as of the end of 2007 since the country opened to such investment in late 1988, standing the second in the country's foreign investment sectorally after electric power.

Currently, 13 foreign oil companies, mainly from Australia, Britain, Canada, China, Indonesia, India, South Korea, Malaysia, Thailand and Russia, are involved in oil and gas projects in Myanmar, according to official sources.

Originally published by Xinhua news agency, Beijing, in English 1506 20 Jun 08.

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