Two Russian oil companies will conduct oil and gas exploration and production in an inland area of Myanmar in cooperation with the state-run Myanmar Oil and Gas Enterprise (MOGE), sources with the MOGE said Saturday.

Under production sharing contracts with the MOGE, the Silver Wave Sputnik Petroleum Pte Ltd and the Silver Wave Energy Pte Ltd of the Russian Federation will carry out the undertakings at an inland block B-2 in Ziphyutaung-Nandaw region, the sources said.

The two Russian oil companies' engagement in oil deal with Myanmar came after JSC Zarubezhneft Itera, the first Russian company which along with the MOGE and the Sun Group of India initiated a production sharing contract last September to explore oil and gas at block M-8 lying in the Mottama offshore area.

The present block B-2 is among the six new inland blocks in the northern part and delta region which the Myanmar authorities reserve for foreign engagement as most of the inland blocks are explored by the state. The five other inland blocks are -- A-1, B- 1, O, P and Q, according to earlier local reports.

These blocks respectively lie in Kachin state's upper Chindwin River region and Hukaung Valley, and the Ayeyawaddy delta region.

There are seven foreign companies currently operating onshore which include Essar Oil Ltd, Focus Energy Ltd, MPRL Exploration and Production Private Ltd, Goldpetrol, CNOOC, Sinopec Oil Company and Chinerry Assests, according to statistics.

Besides the onshore areas, Myanmar has abundance of natural gas resources in the offshore areas. With three main large offshore oil and gas fields and 19 onshore ones, Myanmar has proven recoverable reserve of 18.012 trillion cubic feet (TCF) or 510 billion cubic-meters (BCM) out of 89.722 TCF or 2.54 trillion cubic-meters (TCM)'s estimated reserve of offshore and onshore gas, experts said.

The country is also estimated to have 3.2 billion barrels of recoverable crude oil reserve, official statistics indicate.

The Myanmar figures also show that in the fiscal year 2005-06 which ended in March, the country produced 7.962 million barrels of crude oil and 11.45 billion cubic meters (BCM) of gas. Gas export during the year went to 9.138 BCM, earning over 1 billion US dollars.

More statistics reveal that since Myanmar opened to foreign investment in late 1988, such investment in the oil and gas sector had reached 2.635 billion dollars as of March 2006.

Foreign oil companies engaged in the oil and gas sector mainly include those from Australia, Britain, Canada, China, Indonesia, India, South Korea, Malaysia, Russia and Thailand.

Source: Xinhua