MYANMAR OIL & GAS WEEK 2014

WHERE SHALL WE GO TO FIND OIL AND GAS DISCOVERY ESPECIALLY IN MYANMAR ONSHORE BLOCKS?
KYAW KYAW AUNG EXECUTIVE GEOLOGIST MOGE 25-26 February 2014, Yangon, Myanmar

WHERE SHALL WE GO TO FIND OIL AND GAS DISCOVERY ESPECIALLY IN MYANMAR ONSHORE BLOCKS?

Outline
1. Introduction 2. Sedimentary Basins

3. Historical Exploration and Production

4. Commercial Discovery 5. Possible Future Bidding Round

6. Prospective Blocks
7. Conclusion
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1. Introduction
Information of Drilling and Production.

Onshore Explorations are still not in the line of success.

Easy Oil extracted from shallow and medium has gone. Need to know challenges and poor conditions. Suggestion only based on individual concepts.
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2. Sedimentary Basins

2. Sedimentary Basins (Contd)

SR NO. 1 2 OIL & GAS FIELDS YENANGYAUNG AYADAW YEAR OF DISCOVERY 1887 1893

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4 5 6 7 8 9 10

CHAUK
PAYAGON MYANAUNG PYAY SHWEPYITHA PYALO MANN LETPANDO

1902
1959 1964 1965 1967 1969 1970 1974

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12 13 14 15 16 17 18

PEPPI
HTAUKSHABIN HTANTABIN KANNI APYAUK INDAING DAHATPIN

1976
1978 1980 1985 1991 1996 1998 (Shell)

KYAUKKWET/LETPANDO 1995

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NYAUNGDON
THARGYITAUNG/SABE HTANGAING

1999
2001 2007

(MOGE)

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2. Sedimentary Basins (Contd)

Current Activities carried-out by MOGE and Foreign Companies in Petroliferous basins
Sr. 1. 2. Company MPRL Block No. MOGE-2(North) MOGE- 1 IOR- 2 Field/Area Mann field Yenangyanug field Chauk field Basin CM CM CM Remarks Found no new oil reservoir Found no new oil reservoir Found no new oil reservoir

GOLDPETROL

3.
4. 5. 6.

SIPC
PCML GIS DAEWOO

PSC-D
RSF-2 RSF-3 RSF-1 RSF-7 MOGE-8 RSF-5

Mahudaung
Tuyintaung-Myaing Gwegyo-Ngashantaung Letpando field Padan Pauk-Leya Ondwe

CM
CM CM CM CM CM CM

Found discovery but not yet Commercial Scale

Relinquished by CAL Relinquished by CAL Just started JOA operation Just started MOA operation Just started MOA operation Will start operation in 2014

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ENI

2. Sedimentary Basins (Contd)

Current Activities carried-out by MOGE and Foreign Companies in Petroliferous basins
Sr. 8. 9. Company MPRL Petronas Block No. IOR-4 IOR-5 IOR-6 IOR-7 MOGE-3 EP-1 EP-3 EP-4 MOGE-4 SF-9 Field/Area Pyay oil field Htantabin field Myanaung field Shwepyitha field Natmi Mindon Shwegu Mayaman (Pyay_West) Myintha Pyalo-Paukkaung Basin Pyay EBM Pyay EBM Pyay EBM Pyay EBM Pyay EBM Pyay EBM Pyay EBM Pyay EBM Pyay EBM Pyay EBM Remarks Relinquished by CAL MOGE suspended field MOGE active field MOGE active field Rilinquished by Exspan MOGE drilled test wells MOGE drilled test wells MOGE drilled test wells MOGE drilled test wells MOGE suspended fields

10. MPRL 11. Petronas 12. PTTEP 13. Brunei 14. ONGC 15. Berlanga 16. CAOG 17. GEOPETROL

3. Historical Exploration and Production

MOGE and many International companies carried out some extent of explorations throughout Myanmar. 7 prominent historical explorations in CMB and Pyay Embayment. 1. 2. 3. 4. 5. 6. 7. SIPC in block-D MOGE in Letpando/Kyaukkwet Goldpetrol in Yenangyaung/Chauk MPRL in Mann FEL in Htaukshabin/Kanni CAL in Pyay MOGE in RSF-6/8
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Daily Average BOPD

10000 12000 14000 16000 18000 20000 22000 24000 26000 28000 30000 32000 34000 2000 4000 6000 8000 0

1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81

1981-82
1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02

"Onshore"

Crude Oil Production History of Myanmar

"Offshore"

3. Historical Exploration and Production (Contd)

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2002-03
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

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Daily Average mmscf

1000 1100 1200 1300 1400 100 200 300 400 500 600 700 900

800

1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81

1981-82
1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92

"Onshore"

"Offshore"

Natural Gas Production History of Myanmar

3. Historical Exploration and Production (Contd)

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1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

2003-04
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

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3. Historical Exploration and Production (Contd)

Current Oil and Gas Production of Myanmar
Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Name of Oil/Gas Field Discovery Year 1887 1893 1902 1964 1965 1967 1970 1974 1976 1978 1985 1991 1995 1999 2001 2006 2007 2004 1982 1992

Daily Production Rate

Oil (BOPD) 1940 2 1206 35 86 89 1523 1022 0 592 619 28 28 259 221 10 90 7750 0 0 10484 10484 17895 Gas (MMSCFD) 0.280 1.795 0.202 0.111 0.101 0.324 1.608 0.127 0.363 2.179 0.223 5.942 9.817 19.014 4.466 9.934 0.004 56.490 211.429 434.797 169.074 815.300 871.790

Yenangyaung (Goldpetrol) AYADAW Chauk/Lanywa(Goldprtrol) Myanaung (MPRL) Pyay (MPRL) Shwepyithar (Petronas) Mann (MPRL) LETPANDO PEPPI HTAUKSHABIN KANNI APYAUK KYAUKKWET NYAUNGDON THARGYITAUNG/SABE MAUBIN(SOUTH) HTANGAING/DAHATPIN Onshore Total 18 SHWE 19 YADANA 20 YETAGUN Offshore Total Grand 12 Total

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4. Commercial Discovery
No significant oil field has been discovered within 2 decades (1990 to 2013).

Although some of the potential oil fields like Yenangyaung, Chauk, and Mann had been operated by the foreign oil companies, production before IPR/PCC contract can no longer be maintained. We need to wait and see the new discovery till to next 5 years at least.
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5. Possible Future Bidding Round (Onshore)

I. MOGE Stand-Alone Operating Blocks (6 Nos)
1. RSF-1 (Letpando and Kyaukkwet Fields) 2. RSF-6 (Htangaing/Dahutpin Fields) 3. RSF-8 (Yenanma Field) 4. MOGE-2(South) (Htaukshabin-Kanni-PPI) 5. MOGE-5 (Apyauk-Nyaungdon, MaUBin)
MOGE-2(S) RSF-6 & 8 RSF-1 IOR-1

6. IOR-1 (Thargyitaung, Sabe, Ayadaw Fields)

MOGE-5

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5. Possible Future Bidding Round (Contd)

Is there any Plan in MOE to Release MOGEs Onshore Fields in the Next Bidding Round? Not known yet whether to release active fields in the next bidding round or not. To release current operating fields with PSC or IOR contracts in the future bidding round will be one of the key issues to be discussed seriously between MOE, EPD and MOGE. It is sure that the Unconventional Exploration to be introduced in MOGEs field is highly interested by MOE. The Management will plan to visit to Thailand to learn the contract model, terms and conditions of the Unconventional Exploration. Once the Managements come to know about PSC model and T & C of Unconventional Exploration, the blocks occupied by MOGE could probably be released with Unconventional PSC contract in 2014. Currently, an Australian Company (Tamboran) cooperated with local Myanmar Company has already submitted a proposal to carry out feasibility study for Unconventional Exploration in Htaukshabin/Kanni fields. No response from MOE has been given to Tamboran yet as the idea of Management is to bring all the PSC operations by International tendering process.
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5. Possible Future Bidding Round (Contd)

II. MOGE Reserved Blocks (4 Nos)
What are the Blocks Reserved for MOGE till 2014? 1.PSC-P (Myaungmya) 2.PSC-Q (Payagon) 3.MOGE-6 (Indaing) 4.MOGE-7 (Myanaung East) These 4 Blocks can be released with PSC contract in the 3rd Bidding Round Onshore (2014) since MOGE can no longer retain those blocks for MOGEs reserves without doing anything by themselves or Foreign Companies.

MOGE-7

MOGE-6

PSC-P

PSC-Q

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5. Possible Future Bidding Round (Contd)

III. Remaining Blocks (8 Nos) Onshore Blocks already left remain after 2nd Bidding Round 2013.
1. PSC-C2 (Shwebo-Monywa) 2. PSC-L (Sittwe) 3. PSC-M (Kyaukphyu) 4. PSC-S (Hsipaw-Lashio) 5. PSC-T (Lashio East) 6. PSC-U (Kalaw) 7. PSC-V (Loikaw) 8. IOR-3 (Tetma) These blocks will be released definitely in the 3rd Bidding Round.
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5. Possible Future Bidding Round (Offshore)

Which Offshore blocks will be left remain in the next Bidding Round?
Offshore Shallow Water Blocks recently terminated 1. 2. 3. A-2 (ESSAR) M-1 (Rimbunan) M-10 (CNOOC)
A-2

M-1

No one can know how many shallow and deep water blocks will be left remain after completion of 1st Bidding Round The list of awarded companies and blocks will be announced probably by the first week of March 2014 The 2nd Bidding Round (Offshore) can be possible in early 2015, we guess.
18 M-10

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I. MOGE Operating Blocks (RSF-1, 6, 8, MOGE-2, 5, & IOR-1) 1. Letpando- Kyaukkwet Oil and Gas Field (RSF-1) 2. Htaukshabin-Kanni- Peppi Oil and Gas Field (MOGE-2_South). 1. Letpando-Kyaukkwet Oil and Gas Field (RSF-1) MOGE has signed JOA with GIS company on March 8, 2013. The objective is to boost up the oil production from the shut-in wells and low caliber wells by using the USRHD technique. If this technique is proved to achieve the incremental production from 5 pilot wells, MOE will continue JOA carrying out the next batch in cooperation with GIS. Besides, MOGE allowed another local Myanmar company (Parami) cooperated with a foreign services company (Weatherford) to conduct the production optimization operations using the special products of Weatherford. If there were significant increase in oil production in Letpando Oil Field by using Weatherfords equipments, MOGE will consider to utilize the equipments manufactured by the Weatherford company. So that, both Letpando and Kyaukkwet Oil and Gas fields can be involved continuously with joint operating companies. We think that MOGE will not consider to call on tender for participating in EOR or IPR operations in LetpandoKyaukkwet fields. 19

6. Prospective Blocks

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6. Prospective Blocks (Contd)

I. MOGE Operating Blocks (RSF-1, 6, 8, MOGE-2, 5, & IOR-1) Contd 2. Htaukshabin-Kanni- Peppi Oil and Gas Field (MOGE-2_South)
After Focus Energy Limited relinquished the block, MOGE , stand-alone had been operating the fields since 2009. Many of oil and gas companies are quite interesting to work together with MOGE. Many EOR proposals have been submitted to MOE by PTTEPI, Daewoo, and Petronas. And also, some Myanmar companies have approached to MOGE to work in these fields with PCC Contract during 2009 to 2013. Daewoo and Tamboran have tried to get these fields to work with unconventional shale gas exploration. MOGE have signed MOA only with Daewoo to carry out feasibility study of Unconventional Exploration in Blocks RSF-7 and MOGE-8 instead of HtaukshabinKanni Oil Field since 2 years ago. It does not mean that MOGE is awarding 2 blocks to Daewoo to work with PSC without invitation for International tendering. It is just only MOA to enable to issue a FSR. Tamboran (Australian Company) who wishes to carry out feasibility study for Unconventional Exploration in Htaukshabin/Kanni areas has not got any permission from MOE so far.
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6. Prospective Blocks (Contd)

I. MOGE Operating Blocks (RSF-1, 6, 8, MOGE-2, 5, & IOR-1) Contd

3. Thargyitaung-Sabe-Ayadaw Oil and Gas Fields Narrow and very elongated Oil and Gas Fields. Very limited reservoirs are prevalent in Thargyitaung-Sabe Fields having thin column of oil since gas is almost directly contacted with water. Ayadaw field had been producing mainly gas from the sub-thrust reservoirs since 1972. Primary recovery has been gone except to expect the prospects of deeper horizons only. The production testing results of deeper horizons (Eocene Sandstones) tested in Letpando-Kyaukkwet Field, Block-D in the north of Letpando and MOGE-1 (Chauk Oil field) are not so much encouraging. No EOR or IPR or even PSC operations to be conducted in these fields are recommended. Unconventional technique should be used to produce the oil commercially from the tight sand reservoirs which are well developed in this block.
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6. Prospective Blocks (Contd)

I. MOGE Operating Blocks (RSF-1, 6, 8, MOGE-2, 5, & IOR-1) Contd

4. Apyauk- Nyaungdon- Ma U Bin (South) Oil and Gas Field (MOGE-5) These fields have been producing mainly gas from the stack sandstone reservoirs. Now, 2 fields like Apyauk and Nyaungdon are at the stage of depletion . MOGE and EPD have no practice of releasing a gas dominated field to work together with an International company against the IPR Contract since before. Nobody can predict closely whether MOGE can consider to bring the gas fields into the next bidding round or not . Not preferable fields compared to RSF-1 (Letpando-Kyaukkwet) and MOGE-2_South (Htaukshabin-Kanni-Peppi). 22 22

6. Prospective Blocks (Contd)

I. MOGE Operating Blocks (RSF-1, 6, 8, MOGE-2, 5, & IOR-1) Contd

5. Htangaing-Dahutpin Oil Fields (RSF-6) and Yenanma field (RSF-8)

Oil has been producing from both shallow wells and hand-dug wells. Due to no occurrence of indication of hydrocarbon from MOGE wells drilled to 9000 ft, possibility of finding oil commercially from the deeper horizons would become less. However, if MOGE would change their mind to release this oil producing block to work together with PSC, it is suggested to bid for petroleum exploration . No EOR or IPR or PCC operations to be conducted in Yenanma field (RSF-8) are recommended.
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6. Prospective Blocks (Contd)

I. MOGE Operating Blocks (RSF-1, 6, 8, MOGE-2, 5, & IOR-1) Contd

Summary for MOGEs Operating Blocks There will be no tender invitation for EOR or IPR operations in MOGE operating fields in the next bidding round, 2014. As the Ministry of Energy is quite interesting in Unconventional Exploration and Production nowadays, the Foreign companies should have to pay their attention in presenting new techniques that would become well known to MOGE. MOE and MOGE are now rushing to be acquainted with the contract model, terms and conditions of Unconventional Exploration and within 2014, the International Bidding for the Unconventional PSC Blocks (onshore) will be announced in conjunction with conventional PSC officially.
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6. Prospective Blocks (Contd)

II. MOGE Reserved Blocks (P, Q, MOGE-6 & 7) PSC-P and Q are always reserved for MOGE future operations. Today, gas production from onshore is significantly decreasing and there is no commercial gas discovery after the year 1999.

Most of the gas produced from Onshore is utilized for NGV and it will be very disappointing for all of us when NGV would stop due to shortage of onshore gas.
Therefore, within the Management of MOGE, there will be a serious discussion whether to release these blocks in the next Bidding Round or not. Near the vicinity of PSC-P and Q, there existing huge discoveries of Yadana and Aungsinkha in Offshore that had been operated by Total and PTTEPI. 25 25

6. Prospective Blocks (Contd)

III. Remaining Blocks (PSC-C2, L, M, S, T, U, V, & IOR-3)

Blocks PSC-S, T, U and V are in the Intermountain Basins. International companies did not express their strong interest in the 2nd Bidding Round 2011. The block IOR-3 was also dislike by the 2nd Bidding Round bidders. MOGE and CAL did a lot of seismic, drilling, and production operations having no commercial production of the field. The block C-2 was operated by CNOOC who drilled (5) wells without testing in (3) wells and with hydraulic fracturing in (2) wells. Due to occurrence of lithic sandstone reservoir in both shallow and medium depth, testing were not successful except finding traces of hydrocarbon.
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6. Prospective Blocks (Contd)

III. Remaining Blocks (PSC-C2, L, M, S, T, U, V, & IOR-3) Contd

ESSAR carried out 3D seismic and drilled one exploratory well to about 10000 ft in block-L. As the monsoon comes earlier, the well has been plugged back and abandoned without testing. Narrow weather window and difficult transportation for heavy equipments led to prolonging operation period. Lots of problem such as shale caving, gas cut, and loading mud density using barites created the drilling operation delay and caused the formation damaged. CNOOC drilled (6) wells to shallow and medium depths in block-M having no commercial oil and gas reserves.

Block-M is situated on an island and all the difficulties found in block-M are similar to those in Block-L, for example narrow operational window, poor accessibility and subsurface drilling problems.
No recommendation to be interested in these 2 blocks.
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Remaining Offshore Blocks (A-2, M-1, M-10) No one knows exactly how many shallow and deep water blocks will be left remain after completion of 1st Bidding Round.
In case of no block left remain, only blocks A2, M1 and M10 will be included in the next Bidding Round. There is no doubt that the oil companies have carried out E & P operations in the areas with their best efforts. ESSAR drilled one exploratory well to about 15000 ft in block-A2 without doing production testing, Rimbunan drilled a well to a depth of 7000 ft in block M1 with no testing. After the first well drilling, additional 2D seismic acquisition was conducted to look for the prospect of the 2nd well. But subject to the poor results of seismic, block M1 was relinquished without drilling 2nd well.
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6. Prospective Blocks (Contd)

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Remaining Offshore Blocks (A-2, M-1, M-10) Contd

CNOOC drilled 6 wells to the depths of 6000 7000 ft. According to their testing results, reserves estimate of discovery sand found at those depths are likely to be too less than their economic size. Attempts to firm out the block failed and attempts to carry on production by using process of floating LNG failed, too. My feeling is that block M10 will be the most interesting block among 3 blocks as it is close to M9 of which Zawtika gas field is going to get the first gas in early 2014.

6. Prospective Blocks (Contd)

Why not drilling down the deeper depths to find the potential of deeper reservoirs that can yield a better production against higher flowing pressures rather than shallow reservoirs.
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7. Conclusion
Interest of oil companies are still rising. No significant gap in advanced technologies. No new discovery of oil on land till 2013. No doubt upon the state-of-the-art technologies. No need to consider about the blocks occupied by respective companies. For IOR or Unconventional PSC, RSF-1 will be the priority. Among open PSC onshore blocks P & Q will be the most priority. Block M10 relinquished by CNOOC is the most interesting among 3 shallow water blocks L, M1 and M10. Currently, E & P in deepwater blocks activities will be at very initial stage in Myanmar offshore.
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THANK YOU
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