As an increasing number of international firms vie for Myanmar’s offshore and onshore oil and gas reserves the government is facing mounting calls to fine-tune its regulatory framework for foreign investment in the sector and ensure that environmental safeguards are implemented.
U Thein Aung, a senior lawyer at Myanmar Trademark and Patent Law Firm, which provides legal advice to foreign firms, said the government is moving toward greater legal and regulatory clarity. “New laws related to investment and operation of foreign business in Myanmar will be drafted soon,” he said.
Asian Development Bank energy specialist Kim Jong-inn said the government should “establish a transparent legal and regulatory framework in the energy sector [by] updating or revising the foreign investment law, electricity law and petroleum law”.
The government is, however,
moving more quickly to increase production than it is to enhance legislation.
A spokesperson for the Ministry of Energy told The Myanmar Times last week that the ministry is prioritising exploration and production tenders for oil and gas to foreign companies because they have the technology necessary to bring the resources to market quickly. The statement on July 8 followed the release on July 4 by state-run Myanmar Oil and Gas Enterprise of a prequalified list for the first offshore bidding round of the year.
The tender, which opened in April, drew a host of global companies. Of them, Chevron, Unocal, Total, Oil India, GAIL, China National Petroleum Corporation, JX Nippon, Korea National Oil and Daewoo are on the prequalified list of 61 companies. Each one is permitted to submit a proposal for three blocks.
According to a July 11 report from Thuraswiss, Myanmar Oil and Gas Enterprise will grant licences this year for exploration and production for 30 offshore blocks.
U Thein Aung, however, is urging the government to proceed with caution, saying transparency is paramount, especially in granting licences.
The government is expected to offer at least 20 more offshore blocks for tender by the end of this year, according to an ADB report released in June.
With so much upcoming exploration, Myanmar needs “environmental conservation regulations for environmental and social impact assessments under the Environmental Conservation Law to ensure social and environmental sustainability”, the ADB’s Mr Kim said.
Currently, 16 foreign companies are working on 17 onshore blocks and 15 foreign companies are involved in exploration or production on 20 existing offshore blocks, all in partnership with Myanmar Oil and Gas Enterprise.