Oil & Gas: On- and Offshore logistics challenges Mining / Energy: Moving heavy and oversize loads upcountry Myanmar Customs: import of capital equipment, re-export and duty drawback Myanmar’s Ports and Terminals: realization of present shortfalls

1. MYANMAR
LOGISTICS CHALLENGES
ON‐ AND OFFSHORE

2. AGENDA
1. Oil & Gas:
On‐ and offshore logistics challenges
2. Mining / Energy:
Moving heavy and oversize loads upcountry
3. Myanmar Customs:
Import of capital equipment, re‐export and duty drawback
4. Myanmar’s Ports and Terminals:
Realization of present shortfalls

3. OUR BACKGROUND
•
•
•
•
•
•
•
1983 – 1984 Kinda Dam Hydro Power Project
Most recently MEPE 2x120MW from Thailand
Now j.v. with local company Injynn Co., Ltd.
Injynn established 1993 = 20 year old company
Injynn = marine offshore services
The Freight = onshore project logistics
Together = offer seamless on‐ and offshore services

4. OUR BACKGROUND

5. 1. OIL & GAS:
ON‐ AND OFFSHORE LOGISTICS CHALLENGES

6. RESERVES AND POTENTIAL
• Myanma Oil and Gas Enterprise (MOGE) cites a 2006
estimate of proven reserves at 226 million barrels of oil
and 457 billion cubic meters of gas(1)
• The U.S. Energy Information Administration estimates the
proven oil and gas reserves at 50 million barrels of oil and
10 trillion cubic feet of gas(2)
• The potential appears to be there and the expected boom
will create a bottleneck for the offshore supplies
(1) Source: Myanma Oil and Gas Enterprise (MOGE)
(2) Source: U.S. Energy Information Administration (EIA)

7. ONGOING BIDDING
•
•
•
•
•
Myanmar has around 100 Blocks available
Slightly more than half are Onshore
The rest Offshore
The latest bidding round is for
30 Offshore blocks
– 11 in shallow water
– 19 in deep water blocks
• 18 Onshore blocks
– 16 just awarded early October

8. PRESENT OPERATIONS
Company
MPRL E&P
GoldPetrol
CNOOC
SINOPEC
ESSAR
Nobel Oil
NPCC
SNOG
Onshore Companies
Block
Field/Area
A‐4
A‐5
A‐7
M‐4
M‐7
M‐8
M‐15
M‐16
M‐17
M‐18
Mann Oil Field
Chauk Oil Field
Yenangyaung OF
Shwebo‐Monywa
Mahudaung
Sittwe
Hukawng
Uyu
Ngahlaingtwin
Mepale
Company
Daewoo
ESSAR
KMDC/BOC
MPRL
CNPC
Rimbunan
PetroVietnam
PTTEP
Total E&P
CNOOC
PCML
PCOSB
Offshore Companies
Block
Field/Area
A1, A3, AD7
A2
A5, A7
M15, M16
A6
AD1, AD6, AD8
M1
M2
M3, M4, M9, M11
M5, M6
M10
M12, M13, M14
MD4, MD5, MD6
Rakhine
Rakhine
Rakhine
Thaninthayi
Rakhine
Rakhine
Moattama
Moattama
Moattama
Moattama
Moattama
Moattama
Thaninthayi
8

9. 30 NEW OFFSHORE BLOCKS
Offshore Shallow Water Blocks
No.
Block
Area
1
2
3
4
5
6
7
8
9
10
11
A-4
A-5
A-7
M-4
M-7
M-8
M-15
M-16
M-17
M-18
YEB
Rakhine
Rakhine
Rakhine
Moattama
Moattama
Moattama
Tanintharyi
Tanintharyi
Tanintharyi
Tanintharyi
Tanintharyi
Offshore Deep Water Blocks
No.
Block
Area
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
AD-2
AD-3
AD-4
AD-5
AD-9
AD-10
AD-11
AD-12
AD-13
AD-14
AD-15
AD-16
MD-1
MD-2
MD-3
MD-4
MD-5
MD-6
YWB
Rakhine
Rakhine
Rakhine
Rakhine
Rakhine
Rakhine
Rakhine
Rakhine
Rakhine
Rakhine
Rakhine
Rakhine
Moattama
Moattama
Moattama
Tanintharyi
Tanintharyi
Tanintharyi
Tanintharyi
9

10. 30 OFFSHORE BLOCKS
• Concentration of offshore blocks

11. 30 OFFSHORE BLOCKS
• Need for supply bases to the west and south?

12. PRESENT SUPPLY BASE STATUS
• There is only a single offshore base, operated by MOGE
in Thaketa in operation in Myanmar
• The facility is old and inefficient
• Around 24 nautical miles to the mouth of the river / Gulf
of Martaban
• Other supplies than through Thaketa:
– Ranong in southern Thailand
– Singapore

13. OFFSHORE LOGISTICS CHALLENGES

14. REALITY CHECK
• The many offshore blocks in western and southern
Myanmar present a growing need for offshore supply
bases
• The present supply base is insufficient to cover the
need for all new developments
• The distance from supply base to of the new offshore
blocks may also be too far (especially Ranong and
Singapore)
• New and more efficient supply bases are needed in
closer proximity to the exploration fields

15. REALITY CHECK

16. NEW SUPPLY BASES
Yangon
• Pro:
– Existing infrastructure
available
• Con:
– Cost and availability of
land
– Shallow river, sand banks
– River traffic
– Distance to some of the
production areas
West / South
• Pro:
– Close proximity to new
blocks in the west / south
• Con:
– Lack of infrastructure
– Climatic conditions,
typhoons (west only)

17. SUMMARY OFFSHORE CHALLENGES
1. New bases must be bonded
2. Existing legislation can apply but has not been practiced
yet
3. Land acquisition procedure involves many government
agencies (local, regional, central government)
4. Jetty development (MPA, regional + central government)
5. Bureaucracy needs to be expected
6. No existing infrastructure (west and south) everything
needs to be brought along, including power supply, etc.
7. Climatic conditions (typhoons) in the west

18. 2. MINING/ENERGY:
MOVING HEAVY AND OVERSIZE LOADS UPCOUNTRY

19. LOCATION AND EQUIPMENT
• Potential mining areas and hydro power plants may be in
areas very difficult to access
• Some onshore drilling areas way up north in mountainous
territory
• Mining equipment tends to be very large
• Power plant equipment is ultra heavy
• Drilling equipment less problematic

20. MINING
LARGE AND
HEAVY
EQUIPMENT

21. POWER
ULTRA
HEAVY
EQUIPMENT

22. MAJOR CHALLENGES
1. Maximum transport weight on the road
2. Remote and mountainous territory
3. Large rivers too deep for trucks, too shallow in dry season
for barges
4. Old / new bridges with small payload
5. Bridges with steel frames obstruct wide and high
6. Some areas not suitable to build a by‐pass
7. Lack of proper heavy equipment
8. Endless overhead cables in populated areas
9. Unpaved roads during the rainy season
10. Weather!

23. WEIGHT LIMITS

24. REALITY CHECK: RIVERS AND BRIDGES

25. REALITY CHECK: ROADS AND BRIDGES

26. REALITY CHECK: ROADS, RIVERS, BRIDGES

27. REALITY CHECK: HEAVY COSTS

28. REALITY CHECK: HEAVY COSTS

29. REALITY CHECK: DRY AND RAINY SEASON

30. REALITY CHECK: MOUNTAINS

31. ENGINEERING

32. REMOTE

33. ADDED COSTS
• Added costs for survey and engineering
• Good preparation saves expenses

34. ARE THE RAILWAYS AN OPTION?
North America
Europe

35. ARE THE RAILWAYS AN OPTION?
• Railways network in a dilapidated state
• Narrow gauge = not suitable for large / heavy cargo

36. SUMMARY HEAVY / OVERSIZED UPCOUNTRY
No infrastructure and no heavy equipment upcountry
Weight limitation on roads and bridges
Road conditions in general
Impassable roads during the rainy season (muddy or
flooded)
• Rivers too shallow for barges during the dry season
• Rivers too deep for trucks to pass during the rainy season
• Steep mountainous territory
•
•
•
•

37. 3. MYANMAR CUSTOMS:
IMPORT OF CAPITAL EQPT, RE‐EXPORT AND DUTY DRAWBACK
• Bureaucracy on customs clearance
• Temp import / re‐export tricky
• Proper documentation to distinguish between permanent
and temporary import
• Make sure to have a receipt for customs duties paid to
show on re‐export of the goods
• Licenses for O&G, telecom, electronics and explosives1
are complicated to get by the investor or for local
importer
(1) Only via Ministry of Defense

38. CHALLENGES AND RIGHT APPROACH
•
•
•
•
•
•
•
•
•
No proper guidelines
Different way of interpretation
Customs has the right to query the declared HS Code
Customs has the right to reject the value declared
Declare the value and commodity of goods properly – or
face the consequences
Prepare supporting documentation (brochure, etc.)
If possible do a trial and establish a reference
Prepare early and consult an expert before sending your
goods
Too much focused on Yangon

39. 4. MYANMAR’S PORTS AND TERMINALS:
REALIZATION OF PRESENT SHORTFALLS

40. HISTORY
• The British seized Rangoon and lower Burma in 1852
• The modern era of the Port of Yangon began in 1880 with
the Commissioners for the Port of Rangoon
• By the early 20th century Rangoon’s infrastructure was on
par with London
• Rangoon had become commercial and political hub of
British Burma
• In 1954 the Board of Management for the Port of Rangoon
was established
• In 1972 the Burma Ports Corporation was established
• MPA was set up in 1989 to replace the Burma Ports
Corporation

41. YANGON PORTS THEN

42. PRESENT PORTS (YANGON)
• Myanmar International Terminal Thilawa (MITT) >
Container….. But now Break Bulk, Bulk and Ro/Ro
• Asia World Terminal > Container
• Myanmar Industrial Port > Container
• Myanmar Integrated Port at Thilawa > Liquid Bulk
• Bo Aung Kyaw Port > Container
• Sule Pagoda Wharves > Break Bulk and Ro/Ro

43. PRESENT PORTS (UPCOUNTRY)
Myanmar has a 1,930 km (1,200 miles) coastline
MPA lists the following “ports”:
• Rakhine State:
– Sittwe
– Kyaukphyu
– Thandwe
• Ayeyarwady Division:
– Pathein
• Mon State:
– Mawlamyine
• Tanintharyi Division:
– Dawei
– Myeik
– Kawthaung

44. PRESENT PORTS (UPCOUNTRY)
What is the commercial potential of these “ports”?
• Sittwe > now gradually developing into multi modal transit river
port (Indian driven)
• Kyaukphyu > planning to develop as multi modal port deep sea
to serve the SEZ
• Thandwe > presently no real value or plan
• Pathein > presently no real value or plan
• Mawlamyine > presently no real value or plan
• Dawei > planning to develop as multi modal deep sea port to
serve the SEZ
• Myeik > presently no real value or plan
• Kawthaung > presently no real value or plan

45. PLANNING AND EXPANSION PLANS
• Asia World and MIP in Yangon expanding
• Thilawa > > planning to develop as multi modal port to
serve the SEZ (Japanese driven)
• Sittwe > now gradually developing into multi modal transit
river port (Indian driven)
• Kyaukphyu > planning to develop as multi modal deep sea
port to serve the SEZ (Chinese driven)
• Dawei > planning to develop as multi modal deep sea port
to serve the SEZ (Thai driven)

46. YANGON PORTS NOW

47. SUMMARY PORTS AND TERMINALS
Yangon has some decent container ports
All in downtown adding to the traffic woes
Yangon ports hampered by low / high tide
Yangon ports potential for congestion
Upcountry ports not yet developed for commercial
business
• Other than container ports handling equipment
inadequate
• Country with vast coast line is too dependent on Yangon
ports
•
•
•
•
•

48. FUTURE
Myanmar people are very skilled with their hands
The future could also be fabricating and exporting
For this purpose they need suitable ports
Ports should have a large supporting area next door
A prime example is the Australian Marine Complex in
Western Australia
• Supports Shipbuilding, Fabricating, Subsea and Technology
• Creates opportunities and synergies
• Can share skills and expertise between the different
sectors
•
•
•
•
•

49. FUTURE
• When building ports, roads, bridges and rail infrastructure
the government should right now take into consideration
the future needs of project cargoes
• The usage of the main rivers is vital
• Rivers can be managed!

50. 30 YEARS MYANMAR FROM 1983 ‐2013

51. For more information please contact me at
project@the‐freight.com | myanmar@the‐freight.com