Burma - Country Commercial Guide
Oil and Gas

This is a best prospect industry sector for this country. Includes a market overview and trade data

Last published date: 2022-07-28

Overview 

Current oil and gas production does not fully supply the country’s requirements, while large quantities of natural gas are exported to neighboring countries such as Thailand and China under contracts with developers.  The regime forecasts the state-owned Myanma Oil and Gas Enterprise (MOGE) will earn approximately $1.5 billion from oil and gas projects in FY 2021-2022, with 50 percent of Burma’s foreign currency coming from natural gas revenues. 

The dynamic oil and gas sector reflects the high demand for electricity consumption.  The sector attracted more than $22.4 billion in foreign direct investment (FDI) from 154 permitted foreign enterprises, approximately 30 percent of Burma’s total FDI.  While there is optimism regarding Burma’s potential oil and gas reserves, there is also a large degree of uncertainty.  MOEE, under the previous democratic government, highlighted 16.6 trillion cubic feet (Tcf) of proven onshore and offshore natural gas reserves for investment opportunities, but further exploration may unveil even more substantial reserves.  Burma has 53 inland blocks in operation;17 blocks are operated by 12 companies, mostly international companies.   

Offshore areas are divided into 51 blocks, of which 18 are in operation, and 24 out of 51 are classified as deep sea.  The existing major offshore gas projects are Yadana Project, Yetagon Project, Shwe Project (exporting gas to China), and the Zawtika Project, with 75 percent of production exported to Thailand and China.  The total length of natural gas pipeline in the country is 2,200 miles.  Burma has 45 compressed natural gas (CNG) filling stations and over 27,000 CNG vehicles.  The average domestic natural gas supply is 300 Mcf per day. 

The regime changed the structure and leadership at the MOEE, dividing the MOEE into two ministries, the Ministry of Energy (MOE) and the Ministry of Electric Power (MOEP). 

Under the umbrella of the Ministry of Energy (MOE), the four state-owned enterprises, the Oil and Gas Planning Department (OGPD), Petroleum Products Regulatory Department (PPRD), the Myanma Oil and Gas Enterprise (MOGE), and the Myanma Petrochemical Enterprise (MPE) are responsible for issuing tenders to foreign companies.  OGPD plans long-term and short-term strategies in energy sector development and supervises implementation projects.  MOGE is the oil operator, service provider, and regulator of the oil and gas sector.  MPE is responsible for the downstream petroleum sub-sector.  The other state-owned enterprise, Myanma Petroleum Products Enterprise (MPPE), manages the retail and wholesale distribution of petroleum products through four main fuel terminals, 24 sub-fuel storage facilities, and 12 oil stations across the country.  In February 2022, the EU imposed additional sanctions on state-owned Myanma Oil and Gas Enterprise (MOGE), the fourth round of sanctions since the February 2021 coup.  

 

Private Sector Participation 

To achieve Burma’s electrification goals, significant investment in infrastructure development and power generation will be required to increase the current installed capacity of 4,800 MW towards doubling the power capacity.  There are opportunities for U.S. companies that can provide the following support: technical expertise, consultancy, engineering, project management services, building maintenance, and the installation of power plants for oil and gas, renewables, and conventional power sectors. 


Leading Sub-Sectors 

Liquefied Natural Gas (LNG):  In recent years, due to climate change and lower rainfall, water levels in the main reservoirs fell, resulting in reduced hydropower output, shifting focus to LNG as a medium-term solution to meet domestic electricity needs and fulfill the government’s goal to supply 100 percent sustainable power by 2030 as outlined in the MEMP.  LNG demand is forecasted to reach 2.1 m tons per annum by 2030, fueled mostly by the rising demand for electricity.  Before COVID-19 and the military coup, Burma had planned to open its first LNG-to-power plant in Yangon in April 2020, delivering 750 MW of electricity, but COVID-19 had an unprecedented adverse effect on the demand and supply of oil and gas, which in turn destabilized the LNG supply chains.  

As background, in 2018, four gas-to-power projects received Notices-To-Proceed (NTP).  Three LNG projects are initiated by the Energy Ministry at Kanbauk in the Tanintharyi region, Mee Laung Gyaik in the Ayeyarwady region, and Ahlone in the Yangon region.  At Mee Laung Gyaik, China’s Zhefu and local company Supreme Group to undertake a 1,390MW project, with the first phase to be completed in 36 months and reaching full capacity 12 months later.  Thai-based Toyo-Thai will build a 356MW LNG-to-power plant, while China’s Sinohydro and Supreme will implement a 135MW combined-cycle gas turbine project at Kyaukphyu. 

Burma started its first LNG imports in June 2020, using small-scale vessels and a floating storage unit (FSU).  When the stored LNG was transferred to the onshore site and re-gasified, it was stored and used at natural gas-fired electric power plants, which served to alleviate electricity shortages in Yangon, a densely populated business city.  According to the purchase agreement between Petronas’s LNG unit and CNTIC VPower, 218,000 cubic meters of LNG were imported to Burma in mid-2020.  In July 2020, three Japanese companies, Marubeni Corporation, Sumitomo Corporation, and Mitsui & Co., together with Eden Group, a local conglomerate group, were granted exclusive development rights to run an LNG to Power Plant Project in Yangon Thilawa Special Economic Zone (SEZ).  This $1.5 billion project is expected to start operating by 2025 with a 1,250 MW generating capacity. 

In 2019, China National Technical Import-Export Corporation (CNTIC)-VPower won a tender for a 150MW LNG-to-power project at KyaukPhyu and two projects in Yangon to supply 800MW capacity.  The Yangon projects were completed in late 2020 but did not commence operations due to the plummeting kyat value and the rise of global LNG prices.  In March 2022, the ministry announced the CNTIC-VPower is operating the new 150MW emergency gas power installation at Kyaukphyu, supplied with 30 million cubic feet per day from the local Shwe offshore project. 

 

Newly Installed LNG and Gas Power Plants in 2020 

No 

Power Plants 

Installed Capacity (MW) 

Kyunchaung Natural Gas Power Plant 

20.54 

Ahlone Combined Cycle Gas Turbine (CCGT) Power Plant 

151.54 

Thaketa LNG-fueled Power Plant 

400 

Thilawa LNG-fueled Power Plant 

350 

Kyaukphyu LNG-fueled Power Plant 

150 

Shwetaung Combined Cycle Gas Turbine (CCGT) Power Plant 

28 

 

Total 

1,100.08 

Source:  Ministry Of Energy 

 

Gas-fired:  According to MOE, from 2019 to 2021, other planned projects include Kyauk Phyu – 135MW, Ahlone – 356MW, Kanbauk (first phase) – 615MW, Ywama – 150MW, Puhtoe Lone – 12MW, Myan Aung – 20MW, Thilawa – 108MW, and Mee Laung Gyaik – 1,390MW to be implemented through the national budget, overseas loan or private investment.  A rehabilitation program to upgrade older power stations is planned as well.  In terms of domestic gas consumption, the Combined Cycle Gas Turbine (CCGT) power plants consume 86% of the total natural gas produced in Burma to generate electricity.  The rest is used to produce compressed natural gas (CNG) for vehicles, fertilizer factories, and other businesses.  

During 2019-2020, Burma produced 670,362 MMSCF of natural gas, of which approximately 146,000 MMSCF was used for domestic consumption, with the remainder exported to Thailand and China, earning approximately $4 billion yearly. 

 

Average export gas volumes to Thailand from three major offshore projects in the first two months of 2021 and 2022:

  

Yadana 

Yetagun 

Zawtika 

Total 

Jan-Feb 2022 

420 

42 

232 

694 

Jan-Feb 2021 

408 

15 

245 

668 

Source:  Thai energy ministry; million cubic feet per day 

 

Thailand receives 80% of the production of the Yadana and Yetagun gas projects, with the remaining 20% for domestic use, managed by the Myanmar Oil and Gas Enterprise (MOGE). 

TotalEnergies announced its withdrawal from the Yadana gas project, which is composed of M-5 and M-6 offshore blocks, by July 2022.  Along with the French firm, Chevron plans to exit the Yadana project in 2022.  Thailand’s PTTEP is expected to operate the project.  

PTTEP also operates the M-3 offshore block, a joint venture with Mitsui Oil Exploration Company, which announced its intent to relinquish pending approval by the MOE.  PTTEP acquires 100% ownership as soon as the SAC government approves. 

The major stakeholder of the Yetagun project, Petronas’ subsidiaries Petronas Carigali Myanmar Inc. (PCML) and PC Myanmar (Hong Kong) Limited (PCML), announced withdrawal from the Yetagun project blocks M12, M13, and M14 on April 29, 2022.  Its partner, Japan’s ENEOS, also decided to exit the Yetagun project.  

Crude Oil:  Burma obtains its crude oil sources from both onshore and offshore sites.  There are three refinery plants in Burma:  the Thanlyin plant, the biggest refinery; the Chauk refinery; and the Mann petrochemical complex.  Together, 17 oil blocks are in the production phase, and the total daily output was approximately 10,902 bbl/d in FY 2019-2020, with 40 percent of total production from the onshore Salin basin, which is situated near the two largest oil fields, the Chauk and YeNanGyaung sites.  Both are operated by Interra Resources, a Singapore-based firm.  To fulfill the country’s crude oil demand, 950,000 tons were imported in 2020.  According to Interra Resources’s annual report, onshore oil production capacity in the Chauk and Yenangyang oil fields projects declined from 970,513 barrels in 2020 to 587,060 barrels in 2021 following the military takeover.  

Mid and Downstream:  Starting from the 2010 Burma market liberalization, mid-and downstream industries, such as the distribution and retail businesses related to fuel and petroleum products, have expanded with the growth of gas filling stations, storage facilities, and distribution networks.  The lubricant market is also growing due to a large number of imported vehicles as well as industrial and agricultural machines and equipment.  

According to the regime’s Ministry of Commerce (MOC) and Custom Department data, the country’s total fuel consumption in 2019-2020 was 6.54 million MT.  Burma imported over $ 3.5 billion worth of petroleum products in FY 2019-2020.  One of the biggest market players is the Singapore Puma Energy group, which is the only supplier of jet fuel in the local market.  Puma Energy also operates the largest oil products storage facility in Burma. 

Burma is one of the fastest-growing ASEAN markets for lubricants. Currently, Burma consumes yearly around 134 million liters of finished lubricants. Over a hundred brands of lubricants have been imported to the Burmese market after the government modified its vehicle import policy.  Some big lubricant companies operating in Burma are U.S.-owned Chevron, Shell from the Netherlands, and the Japanese company ENEOS.  Burma imported 131,710 tons of lubricants in FY 2019-2020, with a total value of $161 million.  Major lubricant import partners for Burma are Singapore, Thailand, and the UAE.  

 

Petroleum Products Import in 2019 (By types) 

Sr. 

Main Type 

Volume (MT) 

Value (US$ Million) 

Diesel 

3,239,755 

1,855.22 

Octane 

2,456,565 

1,270.28 

Lubricant 

131,710 

161.23 

Jet Fuel 

193,250 

122.46 

Bitumen 

220,495 

86.05 

LPG 

103,776 

33.03 

  

Grand Total 

6,213,869 

3,528.28 

Source:  Myanmar Custom Department Data 

 

The Myanmar Petroleum Trade Association (MPTA) reported that fuel prices have risen over 100% in the first eight months following the February 2021 coup.  In 2022, with the depreciation in the local currency, the scarcity of U.S. dollars, and the record high rise in global crude oil prices, fuel prices jumped 17-21 % per month.  

 

Fuel price per liter between February 2021 and October 2021 

  

Octane 92 

Octane 95 

Diesel 

Premium Diesel 

 February 2021 

655 

780 

705 

720of  

 September 2021 

1,050 

1,050 

995 

1,000 

 October 2021 

1,555 

1,595 

1,550 

1,560 

 February 2022 

Ks1,645 

Ks1,715 

Ks1,670 

Ks1,680 

March 2022 

Ks1,930 

Ks2,010 

Ks2,025 

Ks2,035 

Source: Myanmar Petroleum Trade Association

  

Opportunities and Challenges 

The deposed civilian-led government had made policy changes opening the power sector for foreign investment, both in the upstream and downstream sectors, which means that 100 percent of foreign-owned companies are allowed to import, store, and process petroleum products and to be involved in retail and distribution lines as well.  In the upstream segment, Burma still holds vast untapped reserves of oil and natural gas, and thus, there are significant opportunities for U.S investors in the Burmese energy market.  However, the military regime has not yet drafted new comprehensive regulations governing energy policy. 

Opportunities for U.S. firms in the oil and gas sector may exist with private entities in such areas as environmental and social impact assessments, infrastructure and equipment, logistics, risk management, legal consultancy services, and human resources.  Additionally, extensive technical expertise is required for seismic and drilling solutions.    

The following are key opportunities in the oil and gas sector, as indicated by the DICA (Directorate of Investment and Company Administration): 

  • Exploration and feasibility studies for projects in mining as well as oil and gas 

  • Medium to large-scale operation of mines and wells 

  • Offshore and onshore opportunities for the exploration and extraction of oil and gas 

  • Establishment of petroleum-based industrial, processing, and supportive facilities (e.g., refineries, fertilizers, LPG, LNG) 

  • Value-added production based on natural resources 

  • Supporting industries, such as machinery, maintenance, consulting services 

  • Establishment of education and research institutions to broaden knowledge as well as the pool of human resources available to this sector 

Tender notices from government ministries are published on the regime’s Ministry of Energy website.  U.S. firms should be aware that tenders are only issued with payment terms in Burmese kyat.  

According to the Enterprise Survey by the World Bank, access to finance and land remain major constraints to doing business in Burma, followed by the shortage of skilled labor. The list of restricted investment activities, including investment activities allowed only in a joint-venture with a Burmese citizen/citizen-owned entity, and the list of investment activities requiring the approval of relevant ministries can be found in the Republic of the Union of Myanmar Investment Commission Notification No.15/2017.  

Resources 

Myanmar Petroleum Trade Association  

Myanma Oil and Gas Enterprise (MOGE)   

MMR Research 

 

Contact Information 
U.S. Commercial Service 
U.S. Embassy, Burma 
Email: office.burma@trade.gov