Woodside Discovery in Myanmar Shows Reserves `Worth Chasing'

  • Australian company sees offshore gas find as `encouraging'
  • Woodside's partners in Myanmar include BG Group, Total SA

Woodside Petroleum Ltd. discovered natural gas off the coast of Myanmar, a positive sign for global energy companies including BG Group Plc and Total SA that are exploring in the once-isolated southeast Asian country.

Woodside, Australia’s second-largest oil producer, will carry out more analysis of the discovery at the Shwe Yee Htun-1 exploration well in the Rakhine Basin off Myanmar’s west coast, the Perth-based company said Monday. The well encountered about 15 meters (49 feet) of so-called net gas pay.

“For a lot of the global players that rushed into the space, this confirms it is prospective and worth chasing,” said Adrian Prendergast, an analyst at Morgans Financial Ltd. in Melbourne. “But there’s still a long a way to go.”

Woodside and its partners BG and Total are among explorers seeking a share of the oil and gas resources in Myanmar, where the government began opening the country to the outside world five years ago. Investors are waiting to see how the country moves forward after Aung San Suu Kyi’s opposition party won a landslide victory in November.

While the find is positive, “given the sovereign risk, you’d need a lot more than that to get comfortable,” Prendergast said.

‘Encouraging Outcome’

Woodside has a 40 percent stake in the venture, while Total holds 40 percent and Myanmar-based MPRL E&P Pte Ltd. owns 20 percent. Woodside owns parts of six blocks alongside partners including BG in the Rakhine Basin that represent 20 percent of the Australian company’s global exploration acreage.

“This discovery is an encouraging outcome for future exploration and appraisal activity in the area,” Woodside Chief Executive Officer Peter Coleman said in the statement. “This de-risks a number of leads which will now be matured.”

Investment opportunities in Myanmar, which sits between China and India, had largely dried up during almost five decades of military rule.

Myanmar has about 10 trillion cubic feet of proven gas reserves, or 2 percent of the Asia-Pacific total, according to BP Plc data. The country earns about $170 million a month from exporting 1.6 billion cubic feet a day of gas to Thailand and China, the Myanmar Times reported in June, citing comments from an energy ministry official.

China National Petroleum Corp., the country’s biggest oil and gas producer, began to import gas by pipeline from Myanmar in 2013, according to a statement on its website.

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