The Oil for Development programme in Myanmar

Myanmar is one of the world’s oldest oil producers, with production dating back to the 19th century. Today, natural gas comprises 90 percent of total production.

A Memorandum of Understanding (MoU) between the governments of Myanmar and Norway, covering the OfD programme, was signed on 11 of May 2017. Norwegian and Myanmar institutions will soon enter into bilateral institutional cooperation agreements for a five-year OfD programme.  

Background

Myanmar is an important natural gas producer in Southeast Asia, though its upstream hydrocarbons sector is underdeveloped.

Sanctions, a lack of technical capacity, opaque regulatory policy, and insufficient investment by foreign firms have significantly impeded the country’s efforts to realize its oil and natural gas production potential as well as develop necessary energy infrastructure. However, many U.S. and European Union sanctions were eased or suspended in 2012 in response to political and economic reforms.

In December 2012, the Norwegian Embassy in Bangkok received a request for petroleum related assistance from the Energy Ministry in Myanmar. During his visit to Norway in February 2013, then President of Myanmar Mr. Thein Sein reiterated this request.

In September 2013, the planning of an OfD programme in Myanmar was formally approved, and throughout 2014, Myanmar and Norway have been working together to map the status and needs of the Myanmar petroleum sector, and to prepare for an OfD programme.

In December 2015, the OfD Steering Committee agreed that the planning of a programme could start in 2016. The intention is a programme agreement encompassing all the four OfD components, with a five-year duration.

In 2016 several activities were carried out in parallel with the planning of the programme:

  • The Ministry of Energy and Electricity drafted a new Petroleum Upstream Law. Norway’s Ministry of Petroleum and Energy provided comments to the draft.

  • A draft for sector specific Environmental Impact Assessment (EIA)-guidelines for the oil and gas sector was completed. This was made possible in part by Myanmar’s environmental authorities participating in several trainings on EIAs related to seismic and exploration drilling operations.

  • Key staff from the Ministry of Finance’s Large Taxpayers’ Office increased their knowledge of oil and gas audits through training sessions held by Norwegian petroleum tax administration experts.

  • An International Monetary Fund (IMF) technical assistance mission reviewed the oil and gas fiscal regime in Myanmar and provided advice as to how it could be improved.
Published 02.07.2014
Last updated 29.05.2017