Myanmar Onshore bidding process

There was no oil and gas bidding process but through direct negotiation with the companies before 2011, the MOE (later known as the MOEE) awarded PSCs through the approval from the Union Government. The MOE (later known as the MOEE) set up an open block bidding process and evaluation and negotiation procedure for awarding PSCs. Offshore open blocks were open for bidding on 11 April 2013 and the last completed bidding round for onshore open blocks was opened on 17 January 2013.

To participate in bidding process for onshore oil and gas blocks in Myanmar, a Letter of Expression of Interest should be sent by mail addressing to the Director General of the Oil and Gas Planning Department (OGPD) and to include*: –

  1. Memorandum of Association and Articles of Association,
  2. Company Registration/Incorporation Certificate,
  3. Latest Annual Report, and
  4. Latest Financial Statement.

* Documentation to be endorsed for authenticity by the respective Embassy of the Republic of the Union of Myanmar in the applicant’s county of incorporation (or nearest Embassy).

Bidders who pass “pre-qualification” i.e. those who demonstrate they have the technical competency: competency to operate as an operator, exploration experience and well drilling experiences and technical know-how to conduct petroleum exploration and development work, will be presented with a General Overview of each block.

  • Proposal Standard Terms and Conditions explained to potential bidders,
  • Bidders submit up to three proposals together with proposed Terms and Conditions,
  • Bidders proposed Terms and Conditions are assessed,
  • Bidders must cooperate with a local company (list of companies will be provided by MOEE website and as of October 2015, over 150 companies were registered with MOGE to serve as local partners).

Onshore oil and gas blocks – Key Terms of Myanmar PSCs

Initial term of the Exploration Period (3 years) –

  • Year 1 – G&G study and seismic acquisition, processing and interpretation;
  • Year 2 – to drill minimum one (1) well;
  • Year 3 – post- well evaluation & to drill one (1) well (or) to drill two (2) wells during Year 2 & 3.

Contractor will have the option to back-off.

1st Extension (2 years) –

  • Year 4 – prospect evaluation;
  • Year 5 – to drill one (1) well (or) to drill two (2) wells during Year 2 & 3.

Contractor will have the option to back-off.

2nd Extension (1 year) –

  • Year 6 – to drill one (1) well

Contractor will have the option to back-off.

Offshore oil and gas blocks in Myanmar

On 7 January 2013, Myanmar’s Ministry of Energy (Ministry) launched its long awaited bidding round for offshore oil and gas blocks. Bids were invited for 30 offshore blocks, including 19 deep water blocks and 11 shallow offshore blocks.

The Ministry opted not to require foreign oil companies to partner with local companies in relation to deep water blocks (provided that Myanmar nationally owned company may include in the bidding process for deep water blocks), however a local partner is still required to exploit onshore and shallow offshore blocks.

Myanmar Offshore bidding process

International Oil and gas companies who wished to bid for offshore oil and gas blocks were invited to submit a Letter of Expression of Interest by mail addressing to the Director General of the Oil and Gas Planning Department (OGPD) and to include*: –

  1. Memorandum of Association and Articles of Association,
  2. Company Registration/Incorporation Certificate,
  3. Latest Annual Report, and
  4. Latest Financial Statement.

* Documentation to be endorsed for authenticity by the respective Embassy of the Republic of the Union of Myanmar in the applicant’s county of incorporation (or nearest Embassy).

Bidders who pass “pre-qualification” i.e. those who demonstrate they have the technical competency: competency to operate as an operator, exploration experience and well drilling experiences and technical know-how to conduct petroleum exploration and development work, will be presented with a General Overview of each block.

  • Proposal Standard Terms and Conditions explained to potential bidders,
  • Bidders submit up to three proposals together with proposed Terms and Conditions,
  • Bidders proposed Terms and Conditions are assessed.

PSCs in Myanmar

Charltons advises natural resources on oil and mining PSCs in Myanmar.

The Government of Myanmar has issued a Model Production Sharing Contract (Model PSC) in relation to onshore blocks. The Model PSC should be read in conjunction with the government’s Standard Terms and Conditions (Onshore). While some of the terms contained in model PSC can be negotiated, certain terms are fixed.

Memorandum on PSCs in Myanmar

Please refer to our detailed Memorandum regarding model production sharing contract for the exploration and production of petroleum for onshore blocks issued by the Government of the Union of Myanmar (May 2013) .

Please also refer to our Table comparing certain key terms of the Model PSC against production sharing contracts PSCs in other jurisdictions.

Government’s New Legislation

The MOEE released a draft bill on “Petroleum Exploration, Drilling and Production Law” in 2019 for public comments and opinions. This Law seeks to reform upstream petroleum sector, and to govern the exploration, drilling and production in addition to the production sharing contract or improved petroleum recovery contract that successful bidders will have to conclude with MOGE. Currently, the update information on this new bill to be enacted and timeframe for its adoption have not known yet.