OVL, GAIL team strikes gas

18 trillion cubic feet estimated in Myanmar block

An Indo-Korean consortium comprising ONGC Videsh, GAIL, Daewoo International Corporation and Korea Gas Corporation yesterday announced the discovery of a "world-class giant gas field" in an exploration block in Myanmar.

The block is expected to have up to 6 trillion cubic feet (TCF) of gas. The consortium expects to find another seven to 12 TCF of gas in the same area.

While OVL holds 20% stake in the block, GAIL has a holding of 10%. Daewoo has the majority holding of 60% and Korea Gas Corporation holds 10% stake in Block A-1, offshore northwest Myanmar.

OVL said the exploratory well, spudded in November last to test the Shwe (meaning gold in Myanma) prospect, penetrated thick gas sand and produced gas at a rate of 32 million cubic feet per day.

While the estimated recoverable reserves of the Shwe discovery are in the range of 4 to 6 TCF, considering the high productivity of the gas reservoir, the daily production capacity of the field can be much more than 500 million cubic feet per day, OVL said.

It said that since there are several seismic anomalies in Block A-1 similar to the anomaly appearing at the Shwe discovery, considerable additional exploration potential is expected from the block.

Myanmar's gas output has been overtaking its declining crude production due to the offshore Yetagun and Yadana gas fields.

French oil firm Total has estimated that Myanmar's crude output averaged 9,500 barrels per day (bpd) in 2002 with another 6,700 bpd coming from condensate production associated with gas production at Yetagun.

It said gas production capacity averaged about one billion cubic feet per day from the two offshore fields and the country's total production in 2002 was 170,000 barrels of oil equivalent per day, of which gas accounted for 90 per cent.

Total and Unocal Corp are the only two major western oil firms operating in Myanmar after others withdrew under pressure from shareholders, governments and rights groups to pull out of the military-ruled country and because of its record of human rights abuses.

The void is being filled mainly be state-controlled Asian oil firms like Malaysia's Petronas and China National Petroleum Corp.