This Natgas Mega-Asset Sale Is A Benchmark In The Battle For Asia

There’s a battle shaping up for control of one of the world’s top natural gas markets. And a key asset sale announced this week may give us an idea of who’s in the lead. 

That’s in the Southeast Asian nation of Myanmar. Where a package of prime offshore natgas fields appears to be coming available for purchase. 

Reuters reported Monday that Chevron is seeking bidders for its Myanmar natgas assets. The principal asset being a 28.3% interest in the producing Yadana and Sein offshore gas fields — both operated by France’s Total. Which produced 117 million cubic feet per day net to Chevron last year. 

The package reportedly could also include Chevron’s A5 exploration block in the offshore Rakhine Basin. 

This deal would be a big one for a number of reasons. Firstly because of the price tag for the assets — which is estimated at about $1.3 billion. A figure that would make a potential sale here the biggest M&A transaction ever completed in Myanmar. 

But more than the price itself, it will be very interesting to see which firms emerge as bidders here. Because Myanmar may be one of the most strategic locations for natgas supply into the critical Asian market. 

With natgas demand rising in big consuming nations like China and Thailand, the Myanmar offshore is one of the best-positioned plays to benefit. Making this asset sale a key test of which companies are most motivated to take control of this surging market.

Sources told Reuters that bidders are likely to include “Japanese trading houses and Chinese companies”. Both of which groups would be logical candidates in wanting to grab an increased slice of the Asian natgas space.

In fact, Japanese and Chinese interests have increasingly been racing against each other for resource assets in Myanmar. With countries like South Korea and India also coming on strong of late.  

All of which makes the Chevron sale a key litmus to see who’s most driven here. Reuters also named Australia’s Woodside Petroleum and Thailand’s PTTEP as possible bidders — watch to see which names emerge on the final list. 

Here’s to a jump ball,

Screen Shot 2015-10-13 at 8.54.15 PM

Dave Forest

Add a Comment

Your email address will not be published. Required fields are marked *