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While other countries may be more reliable and better equipped, Burma has emerged as the new promised land for global oil and gas giants unperturbed by a lack of data on its proven energy reserves.
Since political reforms helped Burma shed its pariah status and prompted international sanctions to be lifted, the world’s major energy firms have been eyeing the potentially oil-and-gas-rich country tucked between China and India.
Thai explorer PTTEP, EPI Holdings of Hong Kong, Swiss firm Geopetro International Holding and Petronas of Malaysia were among a slew of companies to strike exploration deals last June.
In September, French giant Total bought a 40 percent stake in an offshore exploration venture, soon followed by Australia’s biggest energy firm Woodside, while several American and European majors are reportedly poised to join in.
The surge in interest is set to continue following Burma’s invitation for tenders for 18 onshore oil blocks last month, with offers for a further 50 or so offshore blocks pending.
Rangoon will host an international conference for the sector in March, as the buzz over the country’s hydrocarbon reserves intensifies – even though very little is known about them.
“Due to the impact of economic sanctions on Myanmar [Burma] for many years, there has been very limited recent investment,” said Rajiv Biswas, Asia-Pacific Chief Economist for IHS Global Insight.
“Myanmar’s oil and gas reserves have not been sufficiently explored using modern seismic technology, making it an exciting prospective exploration target.”
Burma is one of the rare countries in the world that has not been fully surveyed and “there is huge interest in exploring what we call ‘frontier basins'”, said the spokesman of a foreign oil company.
“There is very little information. Prospects are wide open,” he added, requesting anonymity.
The CIA estimates that Burma is sitting on some 50 million barrels of oil and some 283.2 billion cubic metres of natural gas.
On its webpage, the state-run Myanma Oil and Gas Enterprise (MOGE) cites a 2006 estimate of proven reserves, which stood at 226 million barrels of oil and 457 billions cubic meters of gas.
But sources interviewed by AFP admitted that there figures raised more questions than answers. The only widely agreed assumption is that offshore reserves are more promising than onshore, and gas probably supersedes oil.
Authorities “have been very cautious lately by not quoting any evaluation of discovered reserves or potential resources yet to be discovered,” said Myo Tin, manager of the Myanmar Petroleum Exploration and Production Company Limited, which operates an oil field in the centre of the country.
Foreign firms must be encouraged to enter the sector, he said, citing the “technology intensive” nature of offshore sites that needs major firms “to transfer knowledge in exploration techniques, drilling and development”.
More companies will also reduce the chance of oil giants monopolising territory, he said.
In fact, Burma has been keenly waiting for interest from the global petro-giants to materialise.
Over the last two decades, only Asian companies, led by the Chinese, have dared venture into a country demonised by the international community for its human rights violations.
The two Western groups with a long-term presence in Burma, Total and Chevron, entered before sanctions were imposed and then stood accused of serving the interests of the junta and closing their eyes to forced labour.
Today, however, political reforms have taken off and Burmese companies are jostling to offer partnership deals to foreigners.
This new mood owes much to Thein Sein, a former general turned reformist president, who has made it clear the time has arrived for transparency.
A tender offer in 2012 was reportedly delayed to meet international standards.
“It was postponed because the ministry wanted to improve transparency,” said Kyaw Kyaw Hlaing, Chairman of Smart Group of Companies and former geologist for MOGE, the highly controversial state-run company.
“They want all the procedures and systems to be bullet-proof which means no one can be blamed… It is very good news,” he said.
In the current atmosphere, all bets are on.
For the Burmese, it seems that now is the moment to finally fully exploit their natural resources. The sector represents 34 percent of the country’s exports and is set to grow.
But transparency must come in tandem as part of “the path to democracy,” said Chit Khaing, Chairman of Eden Group, which runs a joint venture with Vietnam’s state-run oil giant PetroVietnam at an offshore site since 2008.
“In our language, we call (oil and gas fields) ‘treasure troves’ as we can expect that they can bring us a large amount of treasure.”