<div><div style="line-height: 15.3999996185303px;">Indian oil and gas major Reliance Industries said it had signed an agreement with Myanmar for a production sharing contract for two offshore blocks.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">Reliance Industries Limited (RIL) will be the operator of the blocks with a 96 per cent participating interest while United National Resources Development Services Co. Ltd, a Myanmar company, will hold the remaining stake.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">Reliance said in a statement its participation was in line with its strategy to expand its international asset base by investing in attractive oil and gas destinations.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">Both the blocks are located offshore in the Tanintharyi basin of Myanmar in water depths up to 3,000 feet and together encompass total area of 27,600 square kilometers.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">"RIL's participation is in line with its strategy to expand its international asset base by investing in internationally attractive oil and gas destinations. The company in this way will leverage its organizational capabilities and expertise to create value for the E&P segment," the Mukesh Ambani-run firm said.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">Myanmar is the latest country where the oil-to-telecom conglomerate is seeking to expand its upstream business after testing waters in nations such as Venezuela and Iraq.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">RIL had bid for three blocks in the Myanmar Offshore Block Bidding Round in 2013 and won two.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">While Myanmar, like India, offers a similar production sharing contract regime that allows recovery of all costs before sharing spoils, its contractual regime is much more attractive.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">Unlike Indian production sharing contracts where the work on an area begins with an exploration phase, Myanmar offers six months of preparation period, followed by up to 12 months of study period after which companies have an option to exit the block. This way they avoid incurring unfruitful expenditure and liquidated damages for not fulfilling work programme.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">The exploration phases begin after this study period.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">While Indian PSC provides for a two-year time from approval of development plan to tie up markets for natural gas and development to commence within 10 years of first discovery well, Myanmar allows an operator to retain a discovery for 7 years even after if it is not considered economical. Also, multiple extensions of one year are available.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">Oil produced in India can be sold at arms length price but gas can only be sold at a prior approved formula. In Myanmar, oil can be sold at arms length while natural gas can be sold at any price that can be realised from the market.</div><div style="line-height: 15.3999996185303px;"> </div><div style="line-height: 15.3999996185303px;">(Agencies)</div></div>
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