Published On: Tue, Dec 18th, 2012

Woodside buys a half stake in Myanmar oil and gas exploration block

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Australia’s Woodside Petroleum announced on Monday, December 10 that it had bought a 50 per cent stake in a second oil and gas exploration block in Myanmar.

Woodside Petroleum, headquartered in Perth, bought the stake in Myanmar Petroleum Resource Limited Exploration and Production’s (MPRL E&P) A-6 offshore block. The block is located in the Rakhine Basin off Myanmar’s western coast in the Bay of Bengal.

The A-6 block is about 250 kilometres south of the giant Shwe Gas Field, according to MPRL E&P, and covers about 9830 square kilometres.

“The offer is for a 50pc interest in the block and is subject to certain conditions including execution of fully-termed agreements, completion of due diligence, and necessary government and other approvals,” Woodside said of the farm-in agreement in a statement.

“The proposal provides the opportunity for Woodside and MRPL E&P to undertake a 3D seismic survey program in the block and also provides an option for future drilling.”

Figures on the deal remain “confidential” according to a Woodside spokesperson.

MPRL E&P signed a production sharing contract with Myanma Oil and Gas Enterprise (MOGE) for the A-6 block in January 2007. In March 2012 the company announced that gas had been discovered in the test wells it had sunk.

Woodside made its initial foray into Myanmar in October with the acquisition of a 40pc stake in the AD-7 block from South Korea’s Daewoo International Corporation through a production sharing contract. The AD-7 block is also located in the Rakhine Basin.

“The Rakhine deep water basin is an exciting frontier exploration area and Block AD-7 is adjacent to the Daewoo-operated Shwe field development,” said Peter Coleman, Woodside’s chief executive officer, of the project.

Like Daewoo in the AD-7 block, MPRL E&P will remain the operator of the A-6 block during the exploration period.

According to a company spokesperson the A-6 block fits with the company’s deep water capabilities and Woodside views the project as an opportunity to complement its portfolio.

“Myanmar is our focus at the moment. We are looking at other countries in the region,” Mr Coleman said in an interview with Bloomberg Television on Monday, November 19. However Woodside does not currently operate an office in Myanmar.

Woodside has looked to aggressively diversify outside of its massive liquefied natural gas projects in its homeland of Australia, where costs are on the rise. Mr Coleman has been highly critical of Australia’s industry regulations and high taxes.

On Monday, December 3, seven days prior to their Myanmar project being made public, the company announced that it had bought a 30pc stake in the Leviathan field off the coast of Israel from Houston, Texas-based Noble Energy.

The deal is valued at US$1.2 billion.

The Myanmar Times

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