Woodside Announces 50 Percent Oil Investment in Myanmar Exploration Block

Woodside Petroleum of Australia recently made an announcement of its purchase of a 50 percent share in Myanmar’s second oil and gas exploration block.

Perth-based Woodside Petroleum purchased the stake in the A-6 offshore oil exploration block from Myanmar Petroleum Resource Limited Exploration and Production. The block’s location is in the Rakhine Basin in the offshore western coast of Myanmar, in the Bengal Bay.

The block is around 250 km south of Shwe Gas Field, said MPRL’s E&P department, and spans almost 9830 square km.

The offer for the block is for an investment of 50 percent, and is under specific conditions, such as execution of agreements that are fully termed, the completion of needed diligence and the required  government and other permits, said Woodside of the farm-in deal.

The proposal gives and MRPL E&P and Woodside the chance to perform a 3D seismic survey project in the oil exploration block and gives a choice for oil drilling in the future.

Figures on the agreement are still confidential, said Woodside’s spokesperson.

A contract on production sharing was signed by MPRL E&P with Myanmar Oil and Gas Enterprise (MOGE) for the A-6 block in January of 2007. In March this year, the firm made an announcement that it found gas in the test wells it had sunk.

In October, Woodside performed its first exploration into Myanmar with the 40 percent stake acquisition in block AD-7 of Daewoo International Corporation of South Korea. The Rakhine Basin is also the block’s location.

The deep water Rakhine basin is a good frontier area for oil and gas exploration, and block AD-7 is beside the Shwe field development, according to Woodside’s CEO Peter Coleman.

Like Daewoo in the AD-7 block, MPRL E&P will stay on board as the A-6 block’s operator during the period of exploration. According to the spokesperson of the company, block A-6 fits the deep water capacities of the company, and Woodside sees the program as a chance to supplement its portfolio.

The company’s focus right now is Myanmar, said Coleman. He further said that the company is considering other nations in the region. But Woodside doesn’t operate a Myanmar office right now.

Woodside has considered expanding aggressively outside of the huge LNG projects in Australia where prices are increasing. The company’s CEO has been very critical of industry regulations of Australia as well as the country’s high taxes.

When the project in Myanmar had been made public, the firm announced that it followed through on its proposed oil investment in a 30 percent share off Israel’s coast from Noble Energy of Texas. The deal’s value is $1.2 billion.