Even as China is showing unprecedented aggression at the borders, it is set to lose to India on another front.
The oil and gas sector in Myanmar could soon see dominance by Indian companies. State-run ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) are on the lookout for assets in Myanmar, in the ongoing round of international bidding for onshore and offshore oil and gas blocks in that country.
There is only one Chinese company in the race for onshore blocks in Myanmar.
According to a list of 59 “prospective bidders” by the ministry of energy in Myanmar, seven Indian companies, including OVL and OIL, are in the race for onshore blocks.
Myanmar has put on the block 30 offshore blocks, 11 shallow and 19 deep-sea oil and gas blocks, on a production-sharing basis. Eighteen onshore blocks, too, are up for grabs.
The seven Indian players in the shortlist are Cairn India, Prize Petroleum, Jubilant Energy (Kharsang), Jubilant Oil and Gas, Gujarat Natural Resources, OVL and Oil India.
“Myanmar is a potential market for us and we are keen on the fresh round of bidding,” said D K Sarraf, managing director of OVL.
Cairn India, controlled by Anil Agarwal-led Vedanta Resources, has cash reserves of $3 billion. The management had indicated they were on the lookout for assets in the subcontinent. The deadline to file expression of interest for offshore blocks is June 14.
According to reports, global giants Royal Dutch Shell, Chevron Corp , ConocoPhillips and Exxon Mobil Corp are battling for offshore blocks.
“Myanmar is a better destination for investors globally as the rules here are more liberal. Hence, there would be more players compared to the first round of auctions in that country. For India, this is strategically important, too,” said Deepak Mahurkar, who leads the oil and gas industry practice at PwC India. Bidders for onshore and offshore shallow blocks should form a partnership with one among the 137 registered entities in Myanmar. Compared to this, 100 per cent foreign direct investment (FDI) is possible for deep-water blocks.
The short-listed international firms for onshore blocks include Nippon Oil & Gas Exploration, Mitsui Oil Exploration, Woodside Energy, Eni International, Petronas and Nido Petroleum.
For Myanmar, which is looking for an economic boom after the end of global sanctions, Indian investments are vital. More so because India is its third largest export market after Thailand and China.
Also, investments in Myanmar are vital to counter the Chinese aggression in oil and gas sector in the region.