Disappointing Gaffney estimate for A-1 in Myanmar

Vol 10, PW 18 (11 Jan 07) People & Policy
     

Myanmar’s shallow water offshore exploration block A-1 is turning out to hold less recoverable gas reserves than previously thought.

India’s GAIL and ONGC Videsh together hold 30% participating interest in this block, which is operated by Daewoo of South Korea. Myanmar authorities have all along claimed that A-1 could hold up to 19-tcf in-place gas.

This figure now turns out to be highly exaggerated going by the latest third party certification received just last month (December). According to these figures from UK-based Gaffney Cline & Associates the â€کbest’ estimate of recoverable reserves at A-1 is 4-tcf and the â€کhigh’ estimate is 10-tcf.

Around July last year Daewoo completed exploratory and appraisal drilling at A-1, which measures around 4000-sq km and in September hired Gaffney to carry out a third party certification of the reserves. Daewoo has drilled about 12 wells on A-1 spread over the Shwe, Shwe Phyu, Shwe Nilar and Ngwe prospects.

In addition, more than 1000-sq km 3D and more than 5000-km 2D seismic have been shot. Two exploratory wells each were drilled on Shwe Nilar and Ngwe prospects but they turned out to be dry holes.

“Both wells at Shwe Nilar were dry,â€‌ says a source. “There were some thin sands at Ngwe but Daewoo estimated that it would not be possible to commercially recover hydrocarbons from them.

The recoverable reserves are contained within the Shwe and Shwe Phyu fields only.â€‌ A gas sector source says there’s only 50% probability that the actual recoverable gas could be higher or lower than GCA’s â€کbest’ estimate.

“And there’s just a 10% probability that the â€کhigh’ estimate (of recoverable reserves) could be met.â€‌ Still, operator Daewoo and partners OVL, GAIL and KOGAS will use GCA’s â€کbest’ estimate when preparing their feasibility report and marketing plans for A-1 gas.

“This is industry practice,â€‌ we are told