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Chevron’s sale would be the largest M&A transaction in the history of Myanmar

U.S. oil and gas major Chevron (ticker: CVX) hopes to sell its gas block stake in Myanmar for an estimated $1.3 billion, according to reports from Reuters. Potential buyers for what would be the largest M&A transaction in the country’s history include Australia’s Woodside Petroleum (ticker: WPL), Thailand’s PTT Exploration and Production, Japanese trading houses and Chinese companies, according to a banking source familiar with the matter.

The sale comes as part of Chevron’s efforts to preserve cash and exit non-core assets as oil prices remain low.

“Companies understand that Myanmar is in a very good position as you have export markets like China and Thailand and a growing domestic market,” said Adrian Pooh, a Singapore-based analyst at energy consultancy Wood Mackenzie.

“It’s kind of one of the last few remaining exploration plays with good prospects as well.”

Chevron owns 28.3% of the Yadana and Sein gas fields operated by France’s Total (ticker: TOT) in the Andaman Sea, which mostly supplies Thai power plants and also has a stake in the pipeline company that transports the gas to the Thai border. Some of the gas is also supplied to Myanmar.

Chevron sale of assets in Myanmar

The company also holds a production sharing agreement in the Rakhine Basin. Its subsidiary holds a 99% stake in the block.

CVX’s net natural gas production in Myanmar last year averaged 117 Mcf/d, making up 2.2% of the company’s annual gas output in 2015.

20% of Woodside’s exploration already in Myanmar

While Woodside declined to comment on whether it was interested in purchasing Chevron’s assets, it highlighted its recent exploration successes, as well as those of its partnerships, in the Rakhine Basin off the coast of Myanmar. Woodside is the largest holder of acreage in six exploration blocks in Myanmar. The six permits make up 46,000 square kilometers (17,760 square miles) and represent 20% of Woodside’s global exploration acreage, according to the company.

Woodside holds a 40% interest in A-6, Woodside Energy (Myanmar) Pte Ltd (Woodside Myanmar) is the joint operator with MPRL E&P Pte Ltd (MPRL E&P) (20% interest). MPRL E&P is operator with respect to government liaison and Woodside Myanmar is the operator with respect to all other operations, including drilling. Total E&P Myanmar holds a 40%, non-operated interest.

Chevron sale of assets in Myanmar

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