Naypyidaw - In  light of Myanmar’s growing environmental concerns and a new emphasis on ensuring contracts are more equitable, the govt is likely to reassess existing contracts for minerals, energy and other resources, said U Soe Thane, the minister who oversees foreign investment. “This is a very sensitive issue. We must be careful – we have to honour old contracts but we must review them.”

More than $20bn has been invested in natural resources projects over the past 30 years by a range of companies, mainly from China  & Asian countries, also Russia, Europe and Australia, according to Myanmar officials. Projects range from copper, nickel, coal and jade mines to oil and gas, both on and offshore.

In the latest auction, companies will be able to bid for rights to up to three of the 30 oil and gas exploration blocks, including full rights for 19 deepwater blocks. This will be a departure from the usual requirement for foreign companies to form partnerships with the state-owned oil and gas company, Myanmar Oil and Gas Enterprise.

Bidders for the remaining 11 shallow water blocks, however, will be required to enter production-sharing arrangements with MOGE, according to the country’s ministry of energy.

The announcement, dated April 11, said: “The potential bidders will be allowed to submit three proposals for any three offshore blocks (shallow water or deep water or both).”

Last month. Auction highlights strong hopes among oil and gas majors of further rich finds in Myanmar. Energy ministry officials predicted at an oil and gas conference in Yangon. Some of the world’s largest hydrocarbons companies would bid for blocks, including Chevron, BP, Woodside and Royal Dutch Shell. ConocoPhillips, ExxonMobil and Statoil.

The prospect of full rights to the deep water blocks is appealing on one hand, say western energy industry executives, even though foreign investors would have to cover the considerable exploration and development costs. In addition, the govt would have the right to purchase stakes, possibly up to 25%, in projects that prove commercial.

Drawbacks include the lack of comprehensive geological data and uncertainty over whether such contracts could be reviewed later, noted one executive.

Last year, in January for exploration rights to 18 onshore blocks, and the sale early of rights, about 10 onshore blocks to foreign companies including Thai state-owned PTTEP and Petronas, of M'sia.

At least another 20 offshore blocks are expected to be offered in the coming year.

At present, at least 12 foreign companies are involved in exploration or production on 27 existing offshore blocks, all in partnership with Myanmar’s state-owned oil and gas company. They include Total, of France, and Chevron, of the US, in a venture that predated western sanctions imposed in the early 2000s.

Total acquired 40% stake in an offshore exploration venture late last year, followed by Woodside of Australia, which bought into a South Korean-led consortium exploring a gasfield off Myanmar’s west coast.