Review on Hydrocarbon Exploration Challenges in Myanmar

U NYAN TUN

Chief Geologist

Myanma Oil and Gas Enterprise

Ministry of Energy

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16 October 2014

Contents

1. Introduction 2. Current Exploration 3. Large Discoveries and concepts 4. Exploration Challenges 5. Conclusions

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1.Introduction

Exploration/ Production History

10th Centuary-1887 (Local oil trade in 1824, export in 1853) 1887 – 1948 ( Mechanic drilling start, discovered CHK, 5 MMBO in 1918) 1948 - 1990 (After Independence to 1988, found new onshore, offshore fields) 1988- 2011 ( Major Gas exporting Countries) After 2011 ( International Bidding Round, 2011 and 2013)

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20 IOC in 28 contracts

AMOCO (USA)-PSC-B YUKONG (KOREA)-PSC-C IDEMITSU (JAPAN)-PSC-D PETROCANADA (CANADA)-PSC-E UNOCAL (USA)-PSC-F SHELL (HOLLAND)-PSC-G BHPP (AUSTRALIA)-PSC-H CROFT (UK)-PSC-I KIRKLAND (UK)-PSC-J KAILIS (AUSTRALIA)-PSC-L EMPIRE (AUSTRALIA)-PSC-L SANTEFE (INDONESIA)-REF-1, RSF-2 APACHE (USA)-EP-3, RSF-9 WESTBURNE (UK)-RSF-6 GOLDWATER (INDONESIA)-YENANGYAUNG/CHAUK BAKER HUGES (USA)-MANN MERCNTILE (CANADA)-IOR-6 ASIA PACIFIC (HONGKONG)-HTAUKSHABIN P.T EXSPAN (INDONESIA)-MOGE-3,EP-1, RSF-5 PACRIM (AUSTRALIA)- PSC-C1, RSF-9 TOTAL (FRENCH)-M5, M6, M8 TEXACO (USA), PREMIER (UK), NIPPON (JAPAN) –M10, M12, M13, M14

6 IOC in 8 contracts

10 IOC in 16 contracts

ONGC (INDIA)- PSC-B2, EP-3 ENI (ITALY)- PSC-K, RSF-5 PVT (PAKISTAN)- PSC-O, PSC-J BNP (BRUNEI)- PSC-EP-1 PETRONAS (MALAYSIA)- IOR-5, IOR-7 PHEC (CANADA)- PSC-C1, PSC-H CAOG (LUXENBOURG)-MOGE-4 JSOC (RUSSIA)- EP-4 PTTEP SA (THAILAND)-MOGE-3 MPRL (BRITISH VIRGIN ISLAND)-IOR-4, IOR-6

2011 International bidding round 2013 International bidding round

NOBEL OIL (RUSSIA)-PSC-E JUBILANT (INDIA)- PSC-I PTTEP SA (THAILAND)- PSC-G/EP-2 PT ISTECH (INDIA)- EP-5 PCML (MALAYSIA)- RSF-2/3 GEOPETROL –RSF-9

NOBEL OIL (RUSSIA)-PSC-A (2008) NOBEL OIL (RUSSA)-PSC-B1 (2008) SIPC (CHINA)- PSC-D (2004) NPCC (CHINA) – PSC-F (2010) ISNOG- PSC-R (2011) CNOOC (CHINA) PSC-M, C1/C2 (2005) ESSAR (INDIA) PSC-L CAL (CHINA)- IOR-3, IOR-4 (2001)

1989-1997

8 IOC in 11 contracts

2001-2011

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CURRENT EXPLORATION PROJECTS

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PSC-D Plan to terminate

PSC-A Temporary Suspension since 1-9-2012

PSC- B1 One well drilled, exploration periods

completed on 4-10-2014

CURRENT EXPLORATION PROJECTS IN CHINDWIN BASIN

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PSC-F one deep well, hydraulic fracturing

RSF 2/3 Two wells drilled, Third well to drill

PSC-G, EP-2 One well being drilled

PSC-E Seismic processing

Letpando –USHRD 4th well completion

RSF-7, MOGE-8- MOU, to submit final report

IOR-2, Yenangyaung/ Chauk Hydraulic

Fracturing

Mann Oil Field- Hydraulic Fracturing Second Batch

CURRENT EXPLORATION PROJECTS IN CENTRAL MYANMAR BASIN

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RSF-9 Interpretation in progress

PSC-I To prepare 700 Km 2D acquisition

EP-5 2D 152.8 Km acquired, Processing in progress

CURRENT EXPLORATION PROJECTS IN PYAY EMBAYMENT & AYEYARWADY DELTA REGION

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LARGE DISCOVERIES AND CONCEPTS

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0

100

200

300

400

500

600

AYD PYGN PPI

YNG

CHK

MAG

PYAY

SPT PYALO

MANN

TSB

HTBN

KNI

KKT/LPDO

NDN

TGT INDAW

MM

BO

OIL DISCOVERY HISTORY

10

0

100

200

300

400

500

600

700

YNG

AYD CHK

PYGN MAG

PYAY

SPT

PYLO

MANN

PPI TSB

HTBN KNI

APK

SGU KKT/LPDO

IDG

NDN

TGT

INDAW

GAS DISCOVERY HISTORY

BC

F

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EXPLORATION CHALLENGES

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Petromin, Nov 2008

Seismic Coverage Maps (Onshore) Seismic Coverage Maps (Off shore)

Exploration Coverage

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Exploration Challenges

• Resource Base and Capacity

• Onshore Deeper prospects

• Carbonate prospects

• Oil Shale

• Unconventional plays

• Production

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Hydrocarbon Resource

Crude Oil Gas

(MMBL) (TCF)

IOIP IGIP

Onshore 22,958.462 9.451

Offshore 100.892 111.265

Total 23,059.354 120.663

ASSESSMENT OF THE RESOURCES IS VITAL FOR ALL STRATEGIC RESOURCE PLANNING. RESOURCE INCREASE?, MOST INCREASE IN GAS RESOURCES. APPRECIATING RISKS AND REWARDS IN EXPLORATION AND DEVELOPMENT IS THE KEY TO DESIGNING THE RIGHT FRAME CONDITIONS AND CONTRACTUAL TERMS. NEED TO KNOW THE POTENTIAL FOR FURTHER DISCOVERIES

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Hydrocarbon Resource

Onshore Deeper Prospects

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Onshore Deeper Prospects

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North – South Sections of Well Shwe Uyu -1 and Uyu-1

Uyu-1 ShweUyu-1

Onshore Deeper Prospects

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LOC-NG#1

TD-12000

ft

NYAUNGGON STRUCTURE

YEDWET STRUCTURE

Onshore Deeper Prospects

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21

MKG(DT)-1

5 km

MKG(DT)-1

Myinkagone DT-1

Carbonate Prospect

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Well Log response of Carbonate at Myinkagone-DT-1

Carbonate Prospect

Oil Shale

• Malepale Basin

- The best known oil shale area in Myanmar.

- Located about 60 miles east of Mawlamyaing between

Dawna Ranges to the west.

- Spoon-shaped basin 12 miles long and 5 miles at its

widest.

- Structure : Syncline with 10 to 20 degree dip on both

flanks.

- Stratigraphy: The fresh water Tertiary sequence

containing oil shale is resting uncomformably on the

older tightly folded pre-Tertiary rocks. 23

Unconventional

• Policy ?

• MOU with Daewoo Company

• Define geological

condition

• Classification of all unconventional gas resources

• Criteria for selection of developer

• Acerage size and term of lease

• Fiscal regime

• Availability of water and environmental issue

Potential Challenges

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Production Challenges

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Production Challenges

~ 5.5 % yearly

~ 10.8 % yearly

Conclusions

Long history experienced, but need good resource management Require to updated current capacity and human resource for oil and gas Need to lay down petroleum policy Facing oil exploration risks on deeper targets, carbonate and deep water area.

Carefully managed cooperation, open ex-changed of experience between MOGE and IOC

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