Domestic sector overview

State of the market

Describe the domestic natural gas sector, including the natural gas production, liquefied natural gas (LNG) storage, pipeline transportation, distribution, commodity sales and trading segments and retail sales and usage.

Crude oil has been produced in Myanmar for many years. Owing to a history of military rule (1962 to 2010) and sanctions, and a lack of technical infrastructure, Myanmar’s natural gas sector is underdeveloped. However, natural gas production has been rising substantially over the past decade, and is now the country’s most important source of export revenue.

Daily gas production was reported to be 50 million cubic feet per day (mmcf/d) (onshore) and 1,900 mmcf/d (offshore) at the end of December 2019.

At present, there are four major gas fields in operation:

  • Yadana, which has been exporting gas to Thailand since 1998, is currently the largest producer in the country, making up approximately 41 per cent of gas production in the country. Its operators are Total (31.2 per cent), Unocal (28.3 per cent), PTTEPI (25.5 per cent) and Myanmar Oil and Gas Enterprise (MOGE) (15 per cent). Its gas production rate was 740 mmcf/d, of which approximately 480 mmcf/d was exported;
  • Yetagun, which has been exporting gas to Thailand since 2000 and produces approximately 5 per cent of gas production in the country. Its operators are Petronas (40.8 per cent), Nippon (19.4 per cent), PTTEPI (19.4 per cent) and MOGE (20.4 per cent). Its gas production rate was 85 mmcf/d, of which approximately 60 mmcf/d was exported;
  • Shwe (Daewoo), which exports gas to China and domestic factories (first gas in July 2013), produces approximately 35 per cent of gas production in the country. Its operators are Daewoo International (51 per cent), MOGE (15 per cent), KOGAS (8.5 per cent), GAIL (8.5 per cent) and ONGC (17 per cent). Its gas production rate was 630 mmcf/d, of which approximately 490 mmcf/d was exported; and
  • Zawtika, which started delivery to Thailand in March 2014, produces approximately 14 per cent of gas production in the country. Its operators are PTTEPI (80 per cent) and MOGE (20 per cent). Its gas production rate was 250 mmcf/d, of which approximately 165 mmcf/d was exported.

The majority of natural gas produced is currently exported to either Thailand (705 mmcf/d from the Yadana, Yetagun and Zawtika fields) or China (490 mmcf/d from the Shwe field).

There is no LNG storage in Myanmar as yet.

In the first nine months of 2019, 798 mmcf/d gas was exported to Thailand from Yadana, Yetagun and Zawtika offshore areas.


What percentage of the country’s energy needs is met directly or indirectly with natural gas and LNG? What percentage of the country’s natural gas needs is met through domestic production and imported production?

Current energy production in Myanmar fails to meet demand. Regarding Myanmar’s population, 70 per cent live in rural areas and 74 per cent lack access to energy. Yangon is the largest city in Myanmar, and it is estimated that only 67 per cent of its residents are connected to the grid.

The country’s primary energy supply includes coal, oil, gas, hydropower and biomass. As of 2019, biomass accounted for 51 per cent of the supply, followed by 13 per cent from natural gas and 17 per cent from oil. Coal and hydropower account for small shares of total energy supply, (2 per cent and 17 per cent respectively). These shares are changing, however, to reflect the rapid expansion of coal and gas production.

Energy consumption by fuel type is shifting in favour of natural gas.

No LNG is imported into Myanmar; however, importation of LNG is under discussion. A tender for EOI was issued in 2016 and received a number of responses. On 30 January 2018, the Ministry of Electricity and Energy (MoEE) issued three ‘notices to proceed’ to investors for imported LNG. As of January 2020, no PPA had been signed.

Government policy

What is the government’s policy for the domestic natural gas sector and which bodies set it?

The State-Owned Economic Enterprises Law (SEE Law) states that the government has the sole right to carry out the exploration, extraction and sale of petroleum and natural gas, and the production of products of the same. However, the government may, in the interest of the state, permit such activities to be carried out jointly between the government and a private or foreign investor, through MOGE, or solely through any other organisations. The energy plan recently announced by MOGE includes a push to increase and promote private participation in the oil and gas sector of Myanmar.

The MoEE is principally responsible for the oil and gas sector. It oversees three state-owned enterprises: MOGE, Myanmar Petrochemical Enterprise (MPE) and Myanmar Petroleum Products Enterprise (MPPE). It also oversees the Oil and Gas Planning Department (OGPD).

In 2013, the government created a National Energy Management Committee and an Energy Development Committee to strengthen coordination and planning among the energy sector’s institutions.

In 2016, the Myanmar Energy Master Plan and National Electrical Plan were issued.

The government is keen to attract foreign investment and issue production-sharing contracts (PSCs). The first bidding round opened in 2011, and six companies were awarded eight blocks. Recent bidding rounds include a round of bidding for 18 onshore blocks in January 2013, including three improved petroleum recovery contracts (IPRs) and 15 PSCs. In October 2013, 11 bidders were awarded 16 onshore blocks. In April 2013, the government announced a new round of bidding for shallow water blocks (11 PSCs) and deepwater blocks (19 PSCs). Thirty shortlisted bidders submitted bids for the second round of bidding in November 2013. In March 2014, 13 bidders were awarded 10 shallow water blocks and 10 deepwater blocks. On 7 May 2015, MOGE announced that another bidding round would not begin until 2016 at the earliest, but did not disclose how many onshore or offshore blocks it would make available. There has been no subsequent announcement.

Potential bidders were required to cooperate with at least one Myanmar nationally owned company registered at the OGPD for onshore and shallow water blocks. As at October 2015, over 150 companies were registered with MOGE to serve as local partners. Bidders for deep offshore blocks could include a Myanmar nationally owned company.

At present, all PSCs have been signed. Myanmar has 53 onshore blocks and 51 offshore blocks. There are 24 onshore blocks and 24 offshore blocks available. Tenders are expected to be called for vacant offshore petroleum blocks in 2020.

The MoEE’s website provides government information on the oil and gas sector:

See summary of the draft new petroleum law under question 39.

Regulatory authorities

Which authorities make regulatory policies and decisions in respect of the production, transmission, distribution and supply of natural gas?

The natural gas sector is under the responsibility of MOGE, a 100 per cent state-owned enterprise. MOGE is responsible for the upstream petroleum sub-sector, and has four basic responsibilities:

  • to explore and produce oil and gas using its own resources;
  • to supply domestic natural gas by constructing its own pipelines;
  • to supply compressed natural gas (CNG) as a substitute fuel for vehicles; and
  • to participate in and oversee production-sharing agreements in cooperation with foreign oil companies.

The OGPD is responsible for negotiating PSCs with foreign oil companies. In practice, investors generally enter into a PSC or an IPR with MOGE when investing in oil and gas projects.

Regulation of natural gas production

Ownership and organisation

What is the ownership and organisational structure for production of natural gas (other than LNG)? How does the government derive value from natural gas production?

Three types of PSC can be awarded: PSC for onshore blocks, PSC for shallow water offshore blocks and PSC for deepwater offshore blocks.

All PSCs in Myanmar share the following features:

  • production periods will generally last 20 years from the date of completion of the development plant, or as according to the gas sales agreement;
  • contractors are required to allot US$25,000 per year to a training fund during the exploration period and US$50,000 per year during the production period;
  • 0.5 per cent of the contractor’s share of profits from petroleum is required to be used for research and development;
  • a signature bonus is required 30 days after the exploration period begins; and
  • 25 per cent of natural gas must be sold to the domestic market at 90 per cent of the fair market price.

All three of the standard PSCs used by the OGPD contain state buy-in provisions. For onshore blocks, the standard PSC reserves a 15 per cent undivided interest for MOGE, with the option for the state to increase its share up to a 25 per cent undivided interest in the project. For offshore blocks, MOGE has the right to buy in up to 20 per cent of the project upon a commercial discovery (increasing to 25 per cent if the reserves are greater than 5 trillion cubic feet).

Companies in the oil and gas sector are subject to a 25 per cent tax on profits under the Income Tax Law. The 2012 Foreign Investment Law (2012 FIL) was repealed by the 2016 Myanmar Investment Law (2016 MIL). Rules for the 2016 MIL were published in 2017. The tax holiday period under the 2016 MIL was uncertain. Myanmar Investment Commission (MIC) Notification No. 10/2017 defines less developed regions, moderate developed regions and developed regions, and tax holiday periods are specified accordingly.

A royalty of 12.5 per cent of all available petroleum is also payable by the contractor. MOGE’s share of profit petroleum (after a contractor’s allowable cost recovery) depends on the level of daily production (and for offshore blocks, the depth of the well). MOGE’s share of production profit ranges from 60 to 90 per cent.

An 8 per cent special goods tax was introduced in January 2016 and a 40 to 50 per cent capital gains tax also exists. There are also signature and other bonuses.

Regulatory framework

Describe the statutory and regulatory framework and any relevant authorisations applicable to natural gas exploration and production.

Current legislation governing the oil and gas sector in Myanmar includes the following 11 principal laws and regulations:

  • the Oilfield Act of 1918;
  • the Oilfield Rules of 1936;
  • the Petroleum Rules of 1987;
  • the Essential Supplies and Services Law No. 13/2012;
  • the Oilfields (Labour and Welfare) Act of 1951;
  • the Petroleum Resources (Development Regulation) Act of 1957 subject to repeal by draft new petroleum law;
  • the Law Amending the Petroleum Resources (Development Regulation) Act of 1969;
  • the Myanmar Petroleum Concession Rules of 1962;
  • the Petroleum and Petroleum Products Law of 2017;
  • the Hand Dug Well Law of 2017; and
  • Notification No. 100/2013, issued by the Ministry of Energy (MoE), relating to importing, storage, transportation and distribution of petroleum and products.

The old petroleum laws deal mainly with rights characterised as concessions. Although the above-mentioned laws relating to petroleum are still applicable, in practice, investors generally enter into PSCs. The terms and conditions of these contracts govern the process so long as they are not contrary to the laws in force. Nevertheless, the petroleum operations under PSC have been governed by MOGE.

The above laws are mostly based on British legal codes of pre-independence Indian statutes. Although the terms and conditions of PSCs largely govern exploration and production (E&P) operations, the above-mentioned Oilfields (Labour and Welfare) Act of 1951 is of continuing importance to contractors and their service companies. Of equal importance in the oil and gas sector are the following:

  • the SEE Law (under which MOGE is assigned responsibility for the E&P sector under PSCs with private companies); and
  • the 2016 MIL, enacted in October 2016, which superseded the 2012 FIL.

The following rules for the 2016 MIL were enacted in 2017:

  • MIC Notification No. 35/2017 - the Foreign Investment Rule - was passed on 30 March 2017;
  • MIC Notification No. 10/2017 - Designation of Development zones - was passed on 22 February 2017;
  • MIC Notification No. 13/2017 - Classification of Promoted Sectors - was passed on 1 April 2017; and
  • MIC Notification No. 15/2017 regarding types of restricted activities - was passed on 10 April 2017.

In the case of employment and labour, the under-mentioned employment and labour related laws in Myanmar are applicable to petroleum sector in Myanmar.

  • The Leave and Holiday Act of 1951 - The Amended Law for Leave and Holiday Law of 2014;
  • the Factory Act of 1951 - The Amended Law for Factory Act of 2016;
  • the Labour Organisation Law of 2011 - The Labour Organisation Ruless;
  • the Settlement of Labour Dispute Law of 2012 - The Settlement of Labour Dispute Rules and the Amended Settlement of Dispute Law of 2014;
  • the Social Security Law of 2012 - The Social Security Rule;
  • the Minimum Wages Law of 2013 - The Minimum Wages Rule;
  • the Employment and Skill Development Law of 2013; and
  • the Payment of Wages Law of 2016,

The Ministry of Environmental Conservation and Forestry issued the National Environmental Quality Emission Guideline (EQEG) on 29 December 2015 as Notification No. 615/2015. The EQEG provides the basis for the regulation and control of noise and vibration, air emissions and liquid discharges from various sources in order to prevent pollution for the purposes of protection of human and ecosystem health. The EQEG applies to the onshore and offshore oil and gas sector, including seismic exploration, exploratory and production drilling, development and production activities, offshore pipeline operations, offshore transportation, tanker loading and unloading, ancillary and support operations, and decommissioning.

Unconventional gas production

Are there different rules for, or any restrictions on, unconventional natural gas production (including fracking)?

No. Basically, there is no unconventional gas production yet in Myanmar. Unconventional production may not be feasible, while MOGE apply similar stipulations of PSC to contractors (participants).

Required security and guarantees

Are participants required to provide security or any guarantees to be issued with a licence to explore for or to store gas?

The current model PSC requires both a parent company guarantee and a performance bank guarantee to be issued with a licence to explore for gas, the second of which is to be provided within 30 days of commencement of the operation date. The performance bank guarantee is issued by a corresponding bank of Myanmar Foreign Trade Bank, in respect of the minimum expenditure commitment of the contractor. In the case of storing petroleum Including gas, additional licence for storage has to be procured by contractors (participants).

Regulation of natural gas pipeline transportation and storage

Ownership and infrastructure

Describe in general the ownership of natural gas pipeline transportation, and storage infrastructure.

MOGE is responsible for the transportation of crude oil and natural gas in Myanmar. Any assets for transportation of natural gas including storage will, therefore, be the property of MOGE under the respective pipeline rights agreements In Myanmar.

Regulatory framework

Describe the statutory and regulatory framework and any relevant authorisations applicable to the construction, ownership, operation and interconnection of natural gas transportation pipelines, and storage.

MOGE is a state-owned enterprise with onshore operatorship, and comes under the government’s budget. It initiates the joint venture process for three drilling rigs, pipeline construction (onshore) and seismic acquisition. It is privatised in downstream (trading and marketing) and uses only conventional resources.

The Ministry of Electricity and Energy (MoEE) was divided into four organisations:

  • regulation (OGPD), which is responsible for coordination, management and regulation;
  • upstream (MOGE), which is responsible for exploration, drilling, production, on-land oil and gas pipeline network and CNG;
  • midstream (MPE), which is responsible for refineries and process, fertiliser plants, methanol plant, carbon dioxide and LPG plants and waxing and tar; and
  • downstream (MPPE), which is responsible for marketing and distribution.

The Ministry of Electric Power and the MoE were recently merged to become the MoEE.

  • Ministry of Electricity and Energy (;
  • Myanmar Oil and Gas Enterprise (MOGE) (;
  • Myanmar Petrochemical Enterprise (MPE) (; and
  • Directorate of Investment and Company Administration (
Land rights

How does a company obtain the land rights to construct a natural gas transportation or storage facility? Is the method for obtaining land rights to construct natural gas distribution network infrastructure broadly similar?

Similar to other former British colonies, the land tenure system in Myanmar recognises freehold and leasehold title. Title must be registered to be effective, and is subject to reservation, in favour of the government, of all mines, mineral products and buried treasures. The government has the right to expropriate land with appropriate consideration. But, in practice, such compensation has to be borne by the investor.

Foreign nationals, or companies with one or more shares owned by foreign nationals, are barred from acquiring land (or any interest in land) by way of a transfer, grant, lease or mortgage, except with government permission.

The 2016 MIL provides a right to lease or use land. Specific procedures for granting land use rights under the 2016 MIL are provided in the MIL Rules issued in 2017.

The Companies Act (1914) has been superseded by the new Companies Law (2017), which came into force on 1 August 2018. The new Companies Law allows up to 35 per cent foreign ownership in a Myanmar company. However, It is still uncertain whether a Myanmar company with 35 per cent foreign share holding can own land.


How is access to the natural gas transportation system and storage facilities arranged? How are tolls and tariffs established?

This information is not available. On a case-by-case basis, such arrangements are negotiated with the relevant government regulator and local government organisation.

Interconnection and expansion

Can customers, other natural gas suppliers or an authority require a pipeline or storage facilities owner or operator to expand its facilities to accommodate new customers? If so, who bears the costs of interconnection or expansion?

Not applicable.


Describe any statutory and regulatory requirements applicable to the processing of natural gas to extract liquids and to prepare it for pipeline transportation.

Not applicable.


Describe the contractual regime for transportation and storage.

Not applicable.

Regulation of natural gas distribution


Describe in general the ownership of natural gas distribution networks.

MOGE is responsible for transporting natural gas, and is overseen by the MoEE.

The MoEE has taken steps to expand the utilisation of LPG as a household fuel. Distribution of LPG is controlled by the government, through MPE. According to MPE, there are three LPG plants with a total design capacity of between 42 and 50mmcf/d. The Minbu LPG Extraction Plant was established by Mitsubishi Heavy Industry Co (Japan), while the remaining two plants, one in Nyaung Don and one in Kyun Chaung, were established by CMC Dong Fang International Co (China).

The MoEE has also taken steps to promote CNG and CNG filling stations.

Regulatory framework

Describe the statutory and regulatory structure and authorisations required to operate a distribution network. To what extent are gas distribution utilities subject to public service obligations?

There is no clear legal or regulatory practice.

Access and pricing

How is access to the natural gas distribution grid organised? Describe any regulation of the prices for distribution services. In which circumstances can a rate or term of service be changed?

The total domestic gas pipeline network ranges from four to 20 inches in diameter and spans 2,200 miles. The domestic pipeline from Yadana to Yangon is 24 inches in diameter and 436km long. The export pipelines from each of the natural gas fields vary in lengths and diameters:

  • Yadana Pipeline (36 inches, 410km);
  • Yetagun Pipeline (24 inches, 274km);
  • Myanmar China Gas Pipeline (40 inches, 782km in Myanmar); and
  • Zawtika Pipeline (28 inches, 300km).

Access to the gas pipeline requires contracting with MOGE. The terms and conditions of contracts with MOGE are not made public.

System/service expansion and limitation

May the regulator require a distributor to expand its system to accommodate new customers? May the regulator require the distributor to limit service to existing customers so that new customers can be served?

Not applicable.


Describe the contractual regime in relation to natural gas distribution.

Not applicable.

Regulation of natural gas sales and trading

Ownership and organisation

What is the ownership and organisational structure for the supply and trading of natural gas?

See question 16.

Government oversight

To what extent are natural gas supply and trading activities subject to government oversight? What authorisations are required to engage in wholesale trading of gas?

Natural gas supply and trading activities are under the control of MOGE.

Trading processes

How are physical and financial trades of natural gas typically completed?

Not applicable.

Available services and products

Must wholesale and retail buyers of natural gas purchase a bundled product from a single provider? If not, describe the range of services and products that customers can procure from competing providers.

Not applicable.

Regulation of LNG

Ownership and organisation

What is the ownership and organisational structure for LNG, including liquefaction and export facilities, and receiving and regasification facilities?

There are currently no LNG facilities in Myanmar. There has been discussion about possible floating receiving and regasification facilities to address the current demand for gas, but no concrete plans have been put in place. A tender for EOI for LNG facilities was issued in 2016 and a number of responses were received. The tender for LNG facilities has been postponed. Three ‘notices to proceed’ with LNG import projects were signed by the MoEE on 30 January 2018 (see question 2).

Regulatory framework

Describe the regulatory framework and any relevant authorisations required to build and operate LNG facilities.

Three LNG projects were initiated by the GOM at Kanbauk in the Tanintharyi region, Mee Laung Gyaing in the Ayeyarwady region and Ahlone in the Yangon region. The French company Total and Germany’s Siemens will install 1,230MW of capacity at Kanbaunk within 48 months. 615MW in the first phase will come online in three years At Mee Laung Gyaing, China’s Zhefu and local company Supreme Group will undertake a 1,390MW project, with the first phase to be completed in 36 months and reaching full capacity 12 months later. The two other projects are smaller and will be implemented in 28 months. Thai-based Toyo-Thai will build the Alhone 356MW LNG-to-power-plant, while China’s Sinohydro and Supreme will implement a 135MW combined-cycle gas turbine project at Kyaukphyu. Progress on each project has been delayed.

The MoEE is the authority that will develop the regulatory framework and relevant authorisations required for LNG facilities in the future.


Describe any regulation of the prices and terms of service in the LNG sector.

Myanmar law is silent as regards this point.

Mergers and competition

Competition authorities

Which government body may prevent or punish anticompetitive or manipulative practices in the natural gas sector?

There is no government body to prevent or punish anticompetitive or manipulative practices specifically for the natural gas sector. The Competition Law, which entered into force on 24 February 2017, established the Myanmar Competition Commission on 31 October 2018 with the notification No. 106/2018 of the Union Government. The Commission is the government body responsible for preventing or punishing anticompetitive or manipulative practices, including those in the natural gas sector. The Commission will be vested with investigative and adjudicative powers.

Competition standards

What substantive standards does that government body apply to determine whether conduct is anticompetitive or manipulative?

Myanmar law is silent as regards this point.


What authority does the government body have to preclude or remedy anticompetitive or manipulative practices?

Similar to other jurisdictions, the Competition Law prohibits anticompetitive agreements and the abuse of a dominant position.

Merger control

Does any government body have authority to approve or disapprove mergers or other changes in control over businesses in the sector or acquisition of production, transportation or distribution assets?

Yes. If the business entity is under the MIC, it will require the MIC’s approval. The MIC may seek advice from the Ministry of Commerce regarding merging regulations under the Competition Law. There are no rules enforced yet to exercise the Law.

Price restrictions

In the purchase of a regulated gas utility, are there any restrictions on the inclusion of the purchase cost in the price of services?

Myanmar law is silent as regards this point. Section 13 of the Competition Law may be applicable once it has come into force.

Corporate governance regulations

Are there any restrictions on the acquisition of shares in gas utilities? Do any corporate governance regulations or rules regarding the transfer of assets apply to gas utilities?

The SEE Law prescribes that gas utilities may only be undertaken by a state-owned enterprise, subject to exceptions allowed by the government for joint ventures between the government and another person or economic organisation. Section 7 of the Competition Law may be applicable.


Foreign participation

Are there any special requirements or limitations on foreign companies acquiring interests in any part of the natural gas sector?

Foreign companies are restricted in acquiring interests in the natural gas sector by the SEE Law and MIC Notification No. 15/2017.

Myanmar’s model PSC (2013) requires contractors to use 25 per cent of their annual budget to procure goods and services either in Myanmar or rendered by Myanmar nationals. The model contract also contains a general requirement that contractors give preference to Myanmar goods and services when they are available locally, and as long as they are of comparable quality, price and availability.

The model contract also requires a contractor to employ qualified citizens of Myanmar to the maximum extent possible.

Previously, offshore oil exploration and production could be undertaken by a 100 per cent foreign-owned contractor. MOGE currently requires that the foreign contractor include a local joint venture partner holding a minority interest for both onshore and shallow water block projects. A deepwater block project may be undertaken by a 100 per cent foreign-owned contractor. For offshore exploration, the government allows a maximum of three blocks for each company.

A list of possible joint venture partners is available on

International agreements

To what extent is regulatory policy affected by treaties or other multinational agreements?

Myanmar is a member of the Association of Southeast Asian Nations (ASEAN), and a participant in the Trans-ASEAN Gas Pipeline project (TAGP project). Myanmar is a party to the ASEAN Memorandum of Understanding on the Trans-ASEAN Gas Pipeline, signed on 5 July 2012 in Bali, Indonesia. The ASEAN Council on Petroleum is developing a regulatory framework including open access, gas transit principles and gas specification harmonisation to facilitate the TAGP project. The updated ASCOPE-TAGP Masterplan 2000 involves the construction of 4,500km of pipelines (mainly undersea) worth US$7 billion. Eight bilateral gas pipeline interconnection projects, with a total length of approximately 2,300km, are currently operating.

The above statistics were produced by the ASEAN Centre for Energy.

Cross-border sales and deliveries

What rules apply to cross-border sales or deliveries of natural gas?

Cross-border sales or deliveries are regulated by the terms of the relevant PSC and gas sales agreement, and terms under law of cross-border jurisdiction.

Transactions between affiliates


What restrictions exist on transactions between a natural gas utility and its affiliates?



Who enforces the affiliate restrictions and what are the sanctions for non-compliance?

Not applicable.

Update and trends

Other regulatory developments of particular relevance to the gas sector

Describe any other recent regulatory trends and developments of particular interest to those operating in the domestic natural gas sector.

Gas sector-specific regulation39 Describe recent trends and developments in the regulation of the domestic natural gas sector.

The Occupational Health and Safety Law in Myanmar was enacted on 15 March 2019.

The Myanmar President Office has published Guidelines for Acceptance of Gifts for the purpose of anti-bribery and anti-corruption since 2016.

Other regulatory developments of particular relevance to the gas sector40 Describe any other recent regulatory trends and developments of particular interest to those operating in the domestic natural gas sector.

A draft new petroleum law was issued in October 2018. A summary of the draft law follows.

Draft new Petroleum Law

A draft law concerning exploration, drilling, and production of petroleum was posted in the Myanmar Gazette on 2 October 2019. This draft law would govern the upstream oil and gas sector, and repeal the 1957 Petroleum Resources (Development and Regulation) Act (1957 Act No. 55).

The draft law applies to petroleum, including crude oil, condensate and natural gas. It provides for issue of permits to conduct exploration and drilling, and operating licences to conduct development and production.

The draft law provides for formation of the Petroleum Activity Regulatory Central Committee (the Central Committee).

A contract is to be entered into between the holder of the permit or operating licence and MOGE to conduct any petroleum activity. The draft states nothing as regards what form of contract should be used. Currently, MOGE is signing production sharing contracts with most contractors. Other common forms of contracts used in the international petroleum sector are concessions and risk-sharing contracts. The draft law is silent on terms for settlement of disputes and governing law.

The draft law provides for designation of blocks, both onshore and offshore, to be announced by the MoEE with the consent of the Central Committee.

MOGE may conduct petroleum activity on its own, or jointly with local or foreign investors using joint ventures (production sharing), joint ventures by shares or any other system of cooperation and perofit sharing.

The MoEE shall supervise and control petroleum contractors, who shall be selected by public tenders, for the benefit of the country.

>Contracts with MOGE will take the form of a joint venture contract, production-sharing contract or profit-sharing contract.

Royalties are fixed at 12.5 per cent. The MoEE may provide for charges, rent, services fees and other charges.

There is no mention of income tax and special goods tax.

Rights granted to contractors prior to enactment of this law shall continue in force. The provisions of the Hand Dug Well Law shall not be applied, and the contractor must establish reserve funds for conservation of environment and a raining fund. The MoEE, with the approval of the union government, may issue work rules in accordance with the nature of the petroleum activity and international petroleum industry practices. In addition, the MoEE with the approval of the union government may issue rules and by-laws. The Central Committee and the MoEE may issue notifications, orders, directives and procedures. The Oil and Gas Planning Department and MOGE may issue orders and directives.

The sector has some significant challenges for foreign investors owing to the lack of established guidelines, lack of clear policy framework, shortage of skilled labour, high corruption, a lack of transparency in the tender and procurement process and in international contracting, and banking payment issues (

On 2 October 2019, notification No. 104/2019 was issued providing a legal framework that requires the disclosure of actual owners of companies involved in the extraction of Myanmar’s natural resources, including oil. This follows the adoption in 2014 of the Extractive Industries Transparency Initiative (EITI), which includes a requirement that member countries disclose beneficial owners by January 2020. The Myanmar government convened a task force in June 2018 to implement the requirements of EITI. Further steps are required.