Government to review artisanal oil wells
The Ministry of Electricity and Energy says it has launched a review of small-scale operations and will introduce a system of licencing for hand-gouge wells in order to formalise the unregulated industry and improve safety and environmental standards.
IN a bid to formalise the murky industry of artisanal oil drilling, the government has initiated a review of smallscale operators and will introduce a system of licensing that it says will clean up the poorly regulated sector.
Speaking at a press conference on September 9, Daw Nilar Oo, deputy director at Myanma Petrochemical Enterprise, said the government needed to introduce tighter safety and environmental standards to the hand-gouged oil business.
“The purpose of issuing licences is so that these people can do their work without damaging the environment and without starting fires, and we are also aiming to develop the areas where this is occurring,” she said.
Hand-gouge wells are widespread in Sagaing, Ayayarwady and Yangon regions, while the government will also issue licenses for Magwe Region, according to officials.
“At present, we are just doing fieldwork and studying the issue. For the hand-gouge wells that are not in accordance with our expectations, we will issue a temporary licence after demanding that they make the right adjustments,” Daw Nilar Oo said.
The Ministry of Electricity and Energy will request a list of artisanal oil drillers, many of which are individuals or small groups, from regional governments. The list is to be completed by September 25, while local governments will then be tasked with disseminating information related to the new liceneces by October 25. The government plans to issue temporary licences to those who meet the minimum standards, while those seeking a longer-term licence will need to apply.
“At present, we are doing fieldwork and studying the situation. For the hand-gouge well businesses that do not meet the norms required, we will issue temporary licences for them only after demanding they make adjustments,” Daw Nilar Oo said.
The new government is also seeking to make amendments to a bill passed by the previous government last year, aiming to make the requirements for the industry more practical, officials said on September 9.
Meanwhile, Myanma Oil and Gas Enterprise confirmed last week that major international oil companies that received permits for exploration in 2013 and 2014 were still in the early stages of research, with many in the process of working the environmental assessments.
“The previous companies that were issued permits are only just at a starting point and they are just measuring potential, although some have not yet even started doing this yet,” said U Than Htun, an adviser to Myanma Oil and Gas Enterprise. “None of the 2014 contract firms has started drilling yet. They are still in the process of getting their EIAs [Environmental Impact Assessments].”
A total of 38 blocks – 20 off-shore and 18 on-shore – were awarded to companies during international bidding rounds conducted in 2013 and 2014, U Than Htun said. Many of these were awarded to international firms and their local partners, such as oil and gas giants Australia’s Woodside Energy (Myanmar), British Shell Myanmar Energy and Japan’s MOECO Oil and Gas Asia, he added.
They will negotiate productionsharing contracts with the stateowned Myanma Oil and Gas Enterprise. But it will be some time before extraction will begin, said U Than Htun, particularly given the decline in global oil prices, which has seen many in the industry less willing to invest.
‘We will issue a temporary licence after demanding that they make the right adjustments.’ Daw Nilar Oo Myanma Petrochemical Enterprise
A child sqeezes oil out of a rag at an artisanal oil field in Minhla township, Magwe Region.