Total in Myanmar: Continuous Development

31/01/2017

Gas production from Yadana Blocks M5 and M6 (approximately 8 billion cubic meters a year) currently supplies half of all gas consumed by Myanmar and some 12% of gas consumed by neighboring Thailand. Total is pursuing its investment in gas exploration to continue to meet local energy needs and support Myanmar's growth in the years to come.

It Started With Yadana

The Yadana gas field, located in the Andaman Sea approximately 60 kilometers offshore, was discovered by state-owned Myanma Oil and Gas Enterprise (MOGE) in 1982. As Myanmar's oil industry was still closed to foreign investment at the time, MOGE lacked the technical and financial resources to develop it. That changed in the late 1980s, when Myanmar decided to call on international companies to develop its hydrocarbon resources. Total was selected and set up Total E&P Myanmar. Then in July 1992, the subsidiary entered into a contract with MOGE that divided the project into three phases:

  • A technical survey of the field to determine whether development would be economically feasible and the search for a long-term purchaser for the gas.
  • Design and construction of the gas production facilities and transmission infrastructure.
  • Gas production by the partners, and transmission by Moattama Gas Transportation Company (MGTC), which the partners set up to build and operate the pipeline.

Construction to Production

In the preliminary phase, the field's reserves were reevaluated at 5,300 billion cubic feet (150 billion cubic meters). Then in 1994 and 1995, after this amount was deemed sufficient to make development economically feasible:

  • Commercial negotiations were concluded with the gas purchaser, the state-owned Petroleum Authority of Thailand (PTT).
  • The MOGE-Total partnership was widened to include Unocal (now Chevron) and the Petroleum Authority of Thailand Exploration & Production (PTTEP).
  • A decision was made to develop both the Yadana field, comprising several platforms for wells, production, living quarters and compression, and the pipeline, made up of a 346 kilometer subsea section to carry the gas to the shore and a 63 kilometer onshore section running to the Thai border.

Production began in 1998 after three and a half years of work and a significant amount of investment. Today, a new pipeline to Yangon ensures that a quarter of production, or around 2 billion cubic meters a year, is supplied to Myanmar's domestic market, with the remainder exported to Thailand.

Gas Development and Exploration Continue

In 2014, further large-scale works began on Blocks M5 and M6 of the Yadana complex with the aim of developing the Badamyar field and installing an additional compression platform. This will allow the Yadana consortium to maintain plateau production until well after 2020.

Total E&P Myanmar is also actively pursuing exploration activities beyond Blocks M5 and M6. In February 2015, it signed an exploration contract for deep offshore Block YWB (100%) after successfully bidding in the Myanmar government's 2013 call for tenders. On October 8th, 2015, Total entered with a 40% interest the A6 Joint venture operated by Woodside (40%) and MPRL (20%). On January 4th, 2016, a gas discovery was announced with the drilling of the deep offshore (2000m) well Shwe Yee Htun 1. End 2016, Total took an interest into 3 additional deep offshore blocks: MD2/MD4 (40%) and MD7 (50%).

Benefiting Myanmar and its Inhabitants

TEPM is committed to Corporate Social Responsibility as a core policy embedded in its operations. It prescribes Ethics, HSE, Code of Conduct and VPSHR principles to all stakeholders, while maintaining one of the most advanced human resources policy in Myanmar. As part of its commitment towards Myanmar and its local communities, TEPM has implemented since 1995 major Socio-Economic programs in the pipeline area to improve Health, enhance access to Education and Skills Development, Access to Energy, Economic Development through Micro Finance, etc… Such programs benefit to 33 villages and around 38 000 people and have become along the years a world class reference in term of CSR and an asset for Myanmar. TEPM also develops nationwide CSR programs and is actively involved in the EITI process.

Concretely, gas production not only generates energy and financial resources, it also creates jobs and spurs social progress for local communities. Some 2,500 people were employed during the construction of the gas facilities and today the project provides employment for more than 1,000 people, including over 300 direct employees. More than 85% of these jobs are filled by Myanmar nationals.

A significant emphasis has also been placed on training. Each year 3,000 days of training are provided, and a technical training center has been set up for local technicians and operators.

Total also offers all of its employees insurance, pension and benefits packages that far exceed local practices and gives them access to employee dialogue forums such as employee representative elections and the employee survey. These social measures for the direct benefit of Total's employees are backed by a broader CSR program aimed at the local community, which has been in place since operations kicked off.

Myanmar Admitted as an EITI Candidate

Myanmar committed to joining the Extractive Industry Transparency Initiative (EITI) in late 2012 and was admitted as a candidate country by the International EITI Board in July 2014. The country then hosted the following meeting of the International Board in October 2014 in Nay Pi Taw, where participants visited the Yadana pipeline area and took stock of the CSR initiatives first-hand. The first EITI report has been submitted to the EITI Board which should decide in 2017 whether or not Myanmar will become a full EITI Member. From the very start of discussions, Total E&P Myanmar has been fully committed to the implementation and success of this initiative through its local and international involvement. The Total Group also actively supports the plan.