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February 21, 2008

MYANMAR/INDIA/GAS BUSINESS
Essar to explore gas in western coast

Indian oil company, the Essar, will start drilling test well to explore natural gas at an inland block in Myanmar's western coastal Rakhine state during this year under a production sharing contract with Myanmar initiated more than two years ago, the local English-language weekly Yangon Times reported Wednesday.

The drilling will be undertaken at Block-L in Sittway of the state. Block-L stands one of the two blocks which the Indian company is to explore gas under the contract signed with the state-run Myanmar Oil and Gas Enterprise in May 2005. The gas exploration on another block A-2 lying off the Rakhine coast will follow later, the report said.

The Essar is another Indian company engaged in oil and gas exploration in Myanmar after the ONGC Videsh Ltd of India and the Gas Authority of India Ltd (GAIL), both of which are being involved in similar activities since 2000 at Block A-1 and A-3 in the same offshore area in partnership with South Korea's Daewoo International Corporation and South Korea Gas Corporation. The consortium is led by Daewoo.

In September last year, the ONGC signed separate production sharing contracts with Myanmar to explore natural gas in three deep-sea blocks of AD-2, AD-3 and AD-9 in the Rakhine offshore areas, according to earlier official report.

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 trillion cubic-feet (TCF) or 510 billion cubic-meters (BCM) out of 89.722 TCF or 2.54 trillion cubic-meters (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 U.S. dollars.

The latest figures indicate that in the first half (April-September) 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 in this sector after electricity industry.

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.


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