Jubilant to invest $80 million in Myanmar oil and gas block

 @ibtimes
on January 10 2012 4:24 AM

London-listed explorer Jubilant Energy expects to initially invest $70 million (45 million pounds) to $80 million on an onshore oil and gas block it was recently awarded in Myanmar, a senior company official said.

The India-focused energy company is in talks with the Southeast Asian country to buy stake in another block, and hopes to finalise a decision in a few weeks, Chief Financial Officer Vipul Agarwal told Reuters.

We had bid for two blocks. They have offered us one, but we are keen for both. We are still negotiating, he said.

Last week, Myanmar awarded 10 onshore oil and gas blocks in its biggest energy tender in years.

With Western companies staying away and lukewarm response from the Chinese, most blocks were awarded to Asian companies, including Malaysia's Petronas and Thailand's PTT Exploration and Production .

Myanmar has been moving fast to implement political reforms and attract investment, but there has been no easing of sanctions imposed by Western countries for human rights abuses under the former military regime.

A new civilian government has embarked on political and economic reform since last year and, if further steps such as the release of political prisoners are taken, sanctions could be loosened.

The country's proven gas reserves at 11.8 trillion cubic feet at end-2010, according to the BP Statistical review, have drawn interest from China and India where strong economic growth is fueling energy demand.

Jubilant won the PSC-1 production sharing block, two sources with direct knowledge of the deal told Reuters last week.

Agarwal did not give details of the likely reserves in the block but said it looked to be a predominantly gas field.

Jubilant will hold nearly 78 percent in the block, with the remainder being held by a local company, he said.

The production sharing contract for the block will likely be signed in two to three weeks.

The company is part of the New Delhi-based Jubilant Bhartia group that controls Indian drugmaker Jubilant Life Sciences , agrochemicals maker Jubilant Industries and restaurant chain Jubilant FoodWorks .

Jubilant Energy, which listed in London in November 2010, currently holds a portfolio of nine blocks in India and an exploration block in Australia.

(Editing by Ranjit Gangadharan)

Share this article

More News from IBT MEDIA