New Thai-Myanmar joint venture to take over offshore oil and gas project

A junta-controlled enterprise signed a new contract with a Thai business last Thursday to explore the Mottama offshore oil and natural gas block where a Chinese state-owned company previously backed out due low profit potential. The Thai-owned company Gulf Petroleum Myanmar (GPM) and the junta-controlled Myanmar Oil and Gas Enterprise (MOGE) signed a production sharing contract (PSC) on May 29 at the junta’s ministry of energy in Naypyitaw, jointly taking over operations of the “Min Ye Thu” project to seek and extract gas or oil from Mottama offshore block M-10, according to junta-run news outlets. The offshore extraction site is in the Andaman Sea west of Dawei, Tanintharyi Region. The Malaysian state-owned firm Petronas, the former operator of the offshore Yetagun oil project, departed from Myanmar after the 2021 military coup, leaving other companies such as GPM to acquire production rights for the project as well as exploration rights for the new Min Ye Thu project. With current offshore oil and gas projects experiencing a decline in production and nearing the close of their lifecycles, the firms are now planning to explore and extract from new blocks, according to the junta-run newspaper Global New Light of Myanmar, citing junta energy minister Ko Ko Lwin. “Benefits such as stronger capital inflows, increased foreign exchange earnings, emergence of domestic employment opportunities, and meeting domestic oil and natural gas needs from one side can be achieved,” he said. This is the first project to be contracted and launched under the junta, with plans to begin extraction in 2028, according to the military regime’s press release. The Chinese state-owned enterprise China National Offshore Oil Corporation (CNOOC) Group and previously contracted with MOGE to drill up to six exploration wells in the same block location. However, after finding only small amounts of gas, they deemed it commercially unviable and returned it around 2013, according to an anonymous source with knowledge of Myanmar’s oil and gas industry. “The natural gas reserve is small. According to CNOOC's calculations, there's only about one billion cubic feet, so it's not commercially viable as an offshore project,” the source told Myanmar Now. “It's propaganda for the SAC,” he said, referring to the military regime by an acronym for its self-styled name, State Administration Council. “Mainly, Kyaw Kyaw Hlaing is the middleman. He also helped GPM get Yetagun during the SAC era.” Despite CNOOC Group’s previous conclusion that developing block M-10 was not commercially viable, the junta is presenting the newly contracted joint project with GPM to explore the offshore block as if it were a promising new production opportunity. GPM, MOGE’s co-operating partner in the Ye Min Thu joint project, was registered in Myanmar in early 2020, with its parent company Northern Gulf Petroleum based in Thailand. GPM chair Kyaw Kyaw Hlaing, a business magnate, is also the director and chair of the SMART Group of Companies. The SMART Group was established in 1994—during the earlier military dictatorship headed by Senior General Than Shwe—to provide services to the oil and gas industry, according to the research group Justice for Myanmar (JFM). Thai business tycoon Chatchai Yenbamroong—a board member in a business owned by former Thai premier Thaksin Shinawatra and advisor to former premier Chaovalit Yongchaiyudh—backs the company, according to a statement published by JFM in June 2022. Kyaw Kyaw Hlaing is well-known in Myanmar as a writer, motivational speaker, and television host as well as a business magnate. As a public figure he often expresses support for the junta in broadcasts by the military-owned channel Myawaddy TV. Although major international oil companies exited Myanmar following the military coup of 2021, Thai companies have replaced them, and all three oil and natural gas production projects in Mottama offshore blocks M-5, M-6 (Yadana), M-9 (Zawtika), M-12, M-13, M-14 (Yetagun) are now operated by Thai companies. Map showing locations of oil and natural gas extraction blocks and projects within and off the coast of Myanmar. Offshore block M-10, the area for which the junta-run MOGE just signed a production contract, is in the Andaman Sea west of Dawei, Tanintharyi Region (Source: Junta’s Ministry of Electric Power) Htet Naing Oo, the permanent secretary of the ministry of electricity and energy for the publicly-mandated National Unity Government (NUG) said they do not recognise contracts signed with the Myanmar military regime as legitimate and will not accept the country’s accountability for them in the future. The junta relies on profits from the extraction of oil, gas, and other natural resources to buy the weapons and ammunition used to oppress Myanmar’s people, he added, and the foreign companies partnering with them are enabling them to continue their abuses. “Further sanctions are needed,” he said. “There are international companies supporting the junta. If these companies are truly sanctioned, it would be more effective. I think the international community should cut off external revenue streams.” Mike, an activist and representative of the Blood Money organisation, agreed that the regime’s use of profits from oil and natural gas funds their oppression of opponents, arson attacks on civilian homes, and indiscriminate airstrikes. “Signing contracts with the Myanmar military, a terrorist criminal gang that has committed genocide and is internationally wanted, amounts to a declaration of support for crimes against humanity and war crimes by the signing governments and companies,” he said. Myanmar has four currently active oil and natural gas projects: Yadana, Yetagun, Zawtika, and Shwe. Two other newly launched exploration projects were also ongoing before the PSC signed on May 29 added a third, according to junta-run media.

New Thai-Myanmar joint venture to take over offshore oil and gas project

A Chinese state-owned company gave up control of the same offshore extraction block in 2013 after finding too little gas to make further exploration or extraction profitable

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