Burma - Oil and GasBurma - Oil and Gas
Overview
Myanmar has one of the most diverse energy sectors in ASEAN region consisting of the following energy sources: 62 hydropower projects, 1 coal-fired power plant, 20 gas-fired power plants and numerous renewable and solar power projects across the country.
The dynamic Oil and Gas sector reflects the high demand of electricity consumption generated by the government’s ambitious Myanmar Energy Master Plan (MEMP). The sector has also attracted more than $22.4 billion in foreign direct investment (FDI) from 154 permitted foreign enterprises, approximately 30 percent of Myanmar’s total FDI. As of January 2017, there was $69 billion in cumulative FDI in the Myanmar oil and gas sector. The ongoing production of oil and gas does not fully supply the country’s demand; large quantities of natural gas are exported to neighboring countries such as Thailand and China under contracts with developers. In 2016, the MEMP was initiated by the Myanmar’s National Energy Management Committee (NEMC) in conjunction with the National Electrification Plan (NEP). The Government of Myanmar’s goal is to achieve universal electrification by 2030. The plan includes a focus on off-grid solutions, 500,000 small-scale, subsidized solar home projects, as well as an additional 35,000 mini-grid solar developments.
Under the umbrella of the Ministry of Electricity and Energy (MoEE), the four state owned enterprises: the Oil and Gas Planning Department (OGPD), the Myanma Oil and Gas Enterprise (MOGE), the Myanma Petrochemical Enterprise (MPE) and the Myanma Petroleum Products Enterprise (MPPE) are responsible for issuing tenders to foreign companies. MOGE is the oil operator, service provider and regulator of oil and gas sector. It oversees the two other state-owned enterprises MPE and MPPE. MPE is responsible for oil and gas exploration, production and domestic gas transmission and MPPE manages retail and wholesale distribution of petroleum products through four main fuel terminals, 24 sub-fuel storage facilities and 12 oil stations across the country. OGPD plans long-term and short-term strategies in energy sector development and supervises implementation projects.
While there is optimism about Myanmar’s potential O&G reserves, there is also a large degree of uncertainty. MoEE highlights 16.6 trillion cubic feet (TCF) of proven onshore and offshore natural gas reserves for investment opportunities but further exploration may unveil more substantial reserves. Now that Myanmar is open to international exploration, major international oil companies are making significant investments using updated technology to locate new sources.
Myanmar has 53 inland blocks in operation;17 blocks are operated by 12 companies, mostly international companies. Offshore areas are divided into 51 blocks, of which 18 are in operation and 24 out of 51 are classified as deep sea. The existing major offshore gas projects are Yadana Project, Yetagon Project, Shwe Project (exporting gas to China) and the Zawtika Project, with 75 percent of production exported to Thailand and China. The daily production rate of the Yadana natural gas project is 910 million cubic feet (Mcf); Shwe produces around 500 Mcf; Zawtika produces 360 Mcf; and Yetagon produces over 250 Mcf. There are six deep rigs, nine medium rigs and eleven shallow rigs. The total length of natural gas pipeline in the country is 2,200 miles. Myanmar has 45 compressed natural gas (CNG) filling stations and has over 27,000 CNG vehicles. The average domestic natural gas supply is 300 Mcf per day.
Private Sector Participation
To achieve Myanmar’s electrification goals, strong investment for infrastructure development and power generation will be required to increase the current installed capacity of 4,800 MW towards doubling the power capacity. There are opportunities for U.S. companies that can provide the following investment support: technical expertise, consultancy, engineering, project management services, building maintenance and the installation of power plants for oil and gas, renewables, LNG and conventional power sectors.
However, the sector has some significant challenges for foreign investors due to the lack of established guidelines, lack of clear policy framework, a shortage of skilled labor, high corruption, a lack of transparency in the tender/procurement process and in international contracting, and banking payment issues.
Source: Census Data
Leading Sub-Sectors
Liquefied Natural Gas (LNG): Among available options to produce electricity, the government currently supports LNG as the best medium-term solution to meet domestic electricity needs. The GOM is proceeding towards a target of providing 47 percent sustainable power by 2020 (under the goal of 100 percent by 2030 as outlined in the MEMP). To that end, MoEE granted permission to carry out three LNG projects with a total value of $5 billion. These projects will be implemented by Total, Siemens, Zhefu and Toyo-Thai and should add about 3,000 megawatts of power to the national grid by 2020-21.
In 2018, four gas-to-power projects received Notices To Proceed (NTP). Three LNG projects are initiated by the GOM at Kanbauk in the Tanintharyi region, Mee Laung Gyaik in the Ayeyarwady region and Ahlone in the Yangon region. At Mee Laung Gyaik, China’s Zhefu and local company Supreme Group will undertake a 1,390MW project, with the first phase to be completed in 36 months and reaching full capacity 12 months later. The two other projects are smaller and will be implemented in 28 months. Thai-based Toyo-Thai will build a 356MW LNG-to-power plant, while China’s Sinohydro and Supreme will implement a 135MW combined-cycle gas turbine project at Kyaukphyu.
Gas-fired: According to MoEE, the three gas-fired projects being under implementation in 2018 are: a 119MW project in Thahton; a 106MW in Thaketa; and 222MW in Myingyan. From 2019 to 2021, there are other projects planned for Kyauk Phyu – 135MW, Ahlone – 356MW, Kanbauk (first phase) – 615MW, Ywama – 150MW, Puhtoe Lone – 12MW, Myan Aung – 20MW, Thilawa – 108MW, and Mee Laung Gyaik – 1,390MW to be implemented through the national budget, overseas loan or private investment. A rehabilitation program to upgrade older power stations will be planned as well.
Mid and Downstream: With Myanmar market liberalization, mid- and downstream industries, such as the distribution and retail businesses related to fuel/petroleum products, have expanded with growth of gas filling stations, storage facilities, and distribution networks. The lubricant market is also growing on the account of large amount of imported vehicles, such as household cars, industrial and agricultural usage of machines and equipment.
Opportunities
The government policy has been to allow the power sector to open up to foreign investment, both in upstream and downstream sectors which means that now 100 percent foreign owned companies are allowed to import, store, and process petroleum products and to be involved in retail and distribution lines as well. One concern, however, is that the GOM has not yet drafted any new comprehensive regulations governing energy policy.
The following are key opportunities in the oil and gas sector, as indicated by DICA (Directorate of Investment and Company Administration):
The list of restricted investment activities, including the list of investment activities allowed only in a joint-venture with a Myanmar citizen/citizen-owned entity and the list of investment activities requiring the approval of relevant ministries can be found at The Republic of the Union of Myanmar Investment Commission Notification No.15/2017: https://www.dica.gov.mm/sites/dica.gov.mm/files/document-files/20170410_eng_42.pdf
Government Tender: In June 2019, EPGE announced five power rental projects of 1,040 MW which will all be on a Build Own Operate (BOO) basis over a five-year concession period. All projects were planned as LNG, but two of the five are planned to be natural gas-fired: Kyun Chuang (Magwe) - 20MW and Ahlone – 120MW. The other three projects; Kyaukphyu - 150MW, Thanlyin – 350MW and Thaketa – 400MW will be LNG to power sites. Tender notices from the MoEE are published at: https://www.moee.gov.mm/en/ignite/page/62
Web Resources
Ministry of Electricity and Energy (www.moee.gov.mm)
Myanma Oil and Gas Enterprise (MOGE) (http://www.moee.gov.mm/en/ignite/page/40)
Myanma Petrochemical Enterprise (MPE) (http://www.moee.gov.mm/en/ignite/page/41)
Directorate of Investment and Company Administration (https://dica.gov.mm)
Contact Information
U.S. Commercial Service
Dr. Khine Wah Lwin
Senior Commercial Specialist
Email: KhineWah.Lwin@trade.gov
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Myanmar has one of the most diverse energy sectors in ASEAN region consisting of the following energy sources: 62 hydropower projects, 1 coal-fired power plant, 20 gas-fired power plants and numerous renewable and solar power projects across the country.
The dynamic Oil and Gas sector reflects the high demand of electricity consumption generated by the government’s ambitious Myanmar Energy Master Plan (MEMP). The sector has also attracted more than $22.4 billion in foreign direct investment (FDI) from 154 permitted foreign enterprises, approximately 30 percent of Myanmar’s total FDI. As of January 2017, there was $69 billion in cumulative FDI in the Myanmar oil and gas sector. The ongoing production of oil and gas does not fully supply the country’s demand; large quantities of natural gas are exported to neighboring countries such as Thailand and China under contracts with developers. In 2016, the MEMP was initiated by the Myanmar’s National Energy Management Committee (NEMC) in conjunction with the National Electrification Plan (NEP). The Government of Myanmar’s goal is to achieve universal electrification by 2030. The plan includes a focus on off-grid solutions, 500,000 small-scale, subsidized solar home projects, as well as an additional 35,000 mini-grid solar developments.
Under the umbrella of the Ministry of Electricity and Energy (MoEE), the four state owned enterprises: the Oil and Gas Planning Department (OGPD), the Myanma Oil and Gas Enterprise (MOGE), the Myanma Petrochemical Enterprise (MPE) and the Myanma Petroleum Products Enterprise (MPPE) are responsible for issuing tenders to foreign companies. MOGE is the oil operator, service provider and regulator of oil and gas sector. It oversees the two other state-owned enterprises MPE and MPPE. MPE is responsible for oil and gas exploration, production and domestic gas transmission and MPPE manages retail and wholesale distribution of petroleum products through four main fuel terminals, 24 sub-fuel storage facilities and 12 oil stations across the country. OGPD plans long-term and short-term strategies in energy sector development and supervises implementation projects.
While there is optimism about Myanmar’s potential O&G reserves, there is also a large degree of uncertainty. MoEE highlights 16.6 trillion cubic feet (TCF) of proven onshore and offshore natural gas reserves for investment opportunities but further exploration may unveil more substantial reserves. Now that Myanmar is open to international exploration, major international oil companies are making significant investments using updated technology to locate new sources.
Myanmar has 53 inland blocks in operation;17 blocks are operated by 12 companies, mostly international companies. Offshore areas are divided into 51 blocks, of which 18 are in operation and 24 out of 51 are classified as deep sea. The existing major offshore gas projects are Yadana Project, Yetagon Project, Shwe Project (exporting gas to China) and the Zawtika Project, with 75 percent of production exported to Thailand and China. The daily production rate of the Yadana natural gas project is 910 million cubic feet (Mcf); Shwe produces around 500 Mcf; Zawtika produces 360 Mcf; and Yetagon produces over 250 Mcf. There are six deep rigs, nine medium rigs and eleven shallow rigs. The total length of natural gas pipeline in the country is 2,200 miles. Myanmar has 45 compressed natural gas (CNG) filling stations and has over 27,000 CNG vehicles. The average domestic natural gas supply is 300 Mcf per day.
Private Sector Participation
To achieve Myanmar’s electrification goals, strong investment for infrastructure development and power generation will be required to increase the current installed capacity of 4,800 MW towards doubling the power capacity. There are opportunities for U.S. companies that can provide the following investment support: technical expertise, consultancy, engineering, project management services, building maintenance and the installation of power plants for oil and gas, renewables, LNG and conventional power sectors.
However, the sector has some significant challenges for foreign investors due to the lack of established guidelines, lack of clear policy framework, a shortage of skilled labor, high corruption, a lack of transparency in the tender/procurement process and in international contracting, and banking payment issues.
Source: Census Data
| U.S. Exports to Myanmar (in thousand US$) | 2014 | 2015 | 2016 | 2017 |
| Mineral Fuel, Oil etc.; Bitumin Subst; Mineral Wax | 424,368 | 686,078 | 606,780 | 869,484 |
| Coal; Briquettes, Ovoids Etc. Mfr From Coal | 2,884 | |||
| Anthracite Coal, Not Agglomerated | 2,884 | |||
| Anthracite Coal, Not Agglomerated (t) | 2,884 | |||
| Oil (not Crude) From Petrol & Bitum Mineral Etc. | 424,368 | 686,078 | 597,450 | 839,127 |
| Lt Oils, Preps Gt=70 percent Petroleum/bitum Nt Biodiesel | 4,187 | 36,454 | 98,102 | 23,571 |
| Unleaded Gasoline, Reformulated Not Cont. Biodiesel (bbl) | 49,415 | |||
| Naphthas Ex Motor Fuel/blend Stock Nt Con Biodiesl (bbl) | 2,595 | |||
| Hydrocarbon Mixtures Lt=50 percent Hydrocarbon Comp’d Nesoi (bbl) | 4,187 | 36,454 | 46,092 | 23,571 |
| Petrol Oil Bitumen Mineral (nt Crud) Etc. Nt Biodiesl | 414,673 | 649,624 | 499,348 | 810,659 |
| Aviation Engine Lubricating Oils (bbl) | 34,373 | |||
| Automotive, Diesel or Marine Engine Lub Oils (bbl) | 404,535 | 484,612 | 408,933 | 463,204 |
| Turbine Lubricating Oil, Including Marine (bbl) | 38,268 | |||
| Automotive Gear Oils (bbl) | 14,898 | 73,678 | 82,879 | |
| Lubricating Oils with Or Without Additives, Nesoi (bbl) | 74,963 | 12,652 | 264,576 | |
| Lubricating Greases with Or Without Additives (bbl) | 2,510 | 4,085 | ||
| White Mineral Oils, Except Medicinal Grade (bbl) | 10,138 | |||
| Waste Oils, Nesoi | 5,508 | 4,897 | ||
| Waste Oils, Not Elsewhere Specified or Included (bbl) | 5,508 | 4,897 | ||
| Petroleum Jelly; Mineral Waxes & Similar Products | 9,330 | 3,286 | ||
| Paraffin Wax Less Than 0.75 percent Oil by Weight | 9,330 | 3,286 | ||
| Paraffin Wax Less Than 0.75 Percent Oil (kg) | 9,330 | 3,286 | ||
| Petroleum Coke, Petroleum Bitumen & Other Residues | 24,187 | |||
| Residue of Pet Oils or Bitumin Oils Nesoi | 24,187 | |||
| Residues of Petroleum Oils or Bitumin Oils, Nesoi (t) | 24,187 |
Leading Sub-Sectors
Liquefied Natural Gas (LNG): Among available options to produce electricity, the government currently supports LNG as the best medium-term solution to meet domestic electricity needs. The GOM is proceeding towards a target of providing 47 percent sustainable power by 2020 (under the goal of 100 percent by 2030 as outlined in the MEMP). To that end, MoEE granted permission to carry out three LNG projects with a total value of $5 billion. These projects will be implemented by Total, Siemens, Zhefu and Toyo-Thai and should add about 3,000 megawatts of power to the national grid by 2020-21.
In 2018, four gas-to-power projects received Notices To Proceed (NTP). Three LNG projects are initiated by the GOM at Kanbauk in the Tanintharyi region, Mee Laung Gyaik in the Ayeyarwady region and Ahlone in the Yangon region. At Mee Laung Gyaik, China’s Zhefu and local company Supreme Group will undertake a 1,390MW project, with the first phase to be completed in 36 months and reaching full capacity 12 months later. The two other projects are smaller and will be implemented in 28 months. Thai-based Toyo-Thai will build a 356MW LNG-to-power plant, while China’s Sinohydro and Supreme will implement a 135MW combined-cycle gas turbine project at Kyaukphyu.
Gas-fired: According to MoEE, the three gas-fired projects being under implementation in 2018 are: a 119MW project in Thahton; a 106MW in Thaketa; and 222MW in Myingyan. From 2019 to 2021, there are other projects planned for Kyauk Phyu – 135MW, Ahlone – 356MW, Kanbauk (first phase) – 615MW, Ywama – 150MW, Puhtoe Lone – 12MW, Myan Aung – 20MW, Thilawa – 108MW, and Mee Laung Gyaik – 1,390MW to be implemented through the national budget, overseas loan or private investment. A rehabilitation program to upgrade older power stations will be planned as well.
Mid and Downstream: With Myanmar market liberalization, mid- and downstream industries, such as the distribution and retail businesses related to fuel/petroleum products, have expanded with growth of gas filling stations, storage facilities, and distribution networks. The lubricant market is also growing on the account of large amount of imported vehicles, such as household cars, industrial and agricultural usage of machines and equipment.
Opportunities
The government policy has been to allow the power sector to open up to foreign investment, both in upstream and downstream sectors which means that now 100 percent foreign owned companies are allowed to import, store, and process petroleum products and to be involved in retail and distribution lines as well. One concern, however, is that the GOM has not yet drafted any new comprehensive regulations governing energy policy.
The following are key opportunities in the oil and gas sector, as indicated by DICA (Directorate of Investment and Company Administration):
- Exploration and feasibility studies for projects in mining as well as oil and gas
- Medium to large-scale operation of mines and wells
- Offshore and onshore opportunities for the exploration and extraction of oil and gas
- Establishment of petroleum-based industrial, processing and supportive facilities (e.g. refineries, fertilizers, LPG, LNG)
- Value-added production based on natural resources
- Supporting industries, such as machinery, maintenance, consulting services
- Establishment of education and research institutions to broaden knowledge as well as the pool of human resources available to this sector
The list of restricted investment activities, including the list of investment activities allowed only in a joint-venture with a Myanmar citizen/citizen-owned entity and the list of investment activities requiring the approval of relevant ministries can be found at The Republic of the Union of Myanmar Investment Commission Notification No.15/2017: https://www.dica.gov.mm/sites/dica.gov.mm/files/document-files/20170410_eng_42.pdf
Government Tender: In June 2019, EPGE announced five power rental projects of 1,040 MW which will all be on a Build Own Operate (BOO) basis over a five-year concession period. All projects were planned as LNG, but two of the five are planned to be natural gas-fired: Kyun Chuang (Magwe) - 20MW and Ahlone – 120MW. The other three projects; Kyaukphyu - 150MW, Thanlyin – 350MW and Thaketa – 400MW will be LNG to power sites. Tender notices from the MoEE are published at: https://www.moee.gov.mm/en/ignite/page/62
Web Resources
Ministry of Electricity and Energy (www.moee.gov.mm)
Myanma Oil and Gas Enterprise (MOGE) (http://www.moee.gov.mm/en/ignite/page/40)
Myanma Petrochemical Enterprise (MPE) (http://www.moee.gov.mm/en/ignite/page/41)
Directorate of Investment and Company Administration (https://dica.gov.mm)
Contact Information
U.S. Commercial Service
Dr. Khine Wah Lwin
Senior Commercial Specialist
Email: KhineWah.Lwin@trade.gov
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.