Ken Tun says there is optimism for Myanmar's Oil & Gas Industry

Ken Tun, CEO, Parami Energy Group of Companies, tells us about the future of Myanmar, and how the country can ensure long term development and growth:

“There is optimism in the air, and we are expecting a series of bigger things happening in the future for Myanmar. Regarding sustainability, Myanmar became an EITI candidate, and new production sharing contracts requires environmental and social impact assessment to be made at every step. There is significant awareness among local players and regulatory bodies on HSE matters and the quality of service. Myanmar so far, after three bidding rounds, has attracted several major oil companies and NOCs.

“Myanmar is one of the last areas on earth with reasonably accessible conventional oil and gas. We are seeing an increase in demand regionally for petroleum, especially with China needing more gas as the country is cutting its use of coal.

“With several EPC projects commissioned of recent, Myanmar has become the largest exporter of gas in Southeast Asia. Locally, the country needs gas to provide electricity to 70% of its population to support its massive economic development plan. Myanmar needs to also build up its refining and processing capabilities as at current the country is a net importer of petroleum products.

“For the next six months onwards, we will see aggressive exploration activities in shallow and deepwater blocks, which is great news for the service industry. In 2009, operators spent US$300m for exploration and drilling activities. The figure has now grown to almost a billion, in 2012.

“I believe sustainability is key to long term success in Myanmar. Sustainability can be achieved with collective actions by government, operators, local players, local communities and institutions. We have been very successful so far in attracting big investment, but long term development in the O&G industry is needed urgently in order to sustain development.

“We can improve on special economic zones laws, and look at how we can unlock incentives and benefit from such laws. There is also a very limited talent pool; therefore we need vocational and formal training programs, with O&G players and the government forming partnerships to build training and education institutions. Finally, local industry development policy needs to upgrade the capacity and capabilities of local SMEs to promote technology transfer.  Therefore, you not only have a competent workforce, but also a strong and supporting industry base.”

We caught up with an anonymous Myanmar Upstream Summit speaker who offered an insight into the O&G sector, hydrocarbon reserves and the role of innovation:

“Over a hundred years ago the biggest achievement in Myanmar’s oil and gas industry was creating one of the biggest O&G company’s in the world. Over the past 50 or so years however, it was about keeping the sector going despite highly adverse conditions, and in more recent times the implementation of open international tenders for onshore and offshore blocks has been the country’s biggest achievement.

“We can all, including Myanmar as a country and foreign investors, reasonably hope for substantial discoveries, ensuring the country’s hydrocarbon production and revenues for the next 30+ years.

“By evolving its fiscal framework and regulatory regime and practices towards international standards, Myanmar can ensure long term development and growth. For example recent reports comparing Myanmar’s production sharing contracts to those currently used in Indonesia and Vietnam are possible guidelines to evolution.

“From a government viewpoint, access to new technologies and making them benefit the country is one of the most pressing reasons for opening up Myanmar to the world. This new era of technology is a key resource in determining the unlocking of new resources.”