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By Niluksi Koswanage and Stuart Grudgings

KUALA LUMPUR, Feb 23 (Reuters) - Myanmar will launch a global tender for six onshore oil and gas blocks as the reforming Southeast Asian country seeks to tap more foreign investment from the West, two Yangon-based sources with direct knowledge of the deals told Reuters.

The latest tender will be issued in late February or early March, according to the sources. It comes hot on the heels of Myanmar's largest oil and gas offering in August that saw 10 out of 18 onshore blocks snapped up, mostly by Asian firms.

Myanmar has opened up to the outside world with astonishing speed since a civilian government took office last March after five decades of army rule. The prospect of the end of Western sanctions has prompted a surge of interest from investors.

The former British colony has been speeding up democratic reforms ahead of April 1 by-elections that are seen as key to the European Union and other Western nations unwinding more sanctions against the previously isolated nation.

Under the new tender, Myanmar will offer two fields under production-sharing contracts while the rest will be awarded under marginal field development and improved petroleum recovery contracts, one of the sources said.

"The new tender will come soon after the winners of the earlier tender sign their deals in February," said one of the sources, who declined to be identified.

"Myanmar is expecting interest from Asian countries. And there may be more interest from Western countries this time around," the source added.

A spokesman with Myanmar's Energy Ministry confirmed the country would be issuing an international tender for the onshore blocks "very soon" but declined to give further details.

MORE OPPORTUNITIES

In an interview with Reuters last month, Minister of Energy Than Htay pegged the country's natural gas reserves at 22.5 trillion cubic feet, almost double the 11.8 trillion estimated by oil major BP in its 2011 statistical review.

Myanmar's neighbours -- from China and India to Thailand and Bangladesh -- have been sizing up its natural gas fields, hoping they can feed their own fast-growing energy needs.

The new tender will likely attract bids from energy-guzzling China, although the sources said the government was leaning towards other Asian neighbours amid a cooling of ties with its huge northern neighbour and largest investor.

In the last global tender, Southeast Asian firms such as Malaysia's Petronas and Thailand's PTT Exploration and Production bagged contracts for two fields each.

Two little-known Chinese firms also secured blocks, although interest from Chinese state-linked firms appeared to be lukewarm, particularly after Myanmar scrapped a proposed dam last year following opposition to the China-funded project.

"Myanmar would like to look at India and Southeast Asia. There is the idea that China has a lot of investment already in Myanmar and other countries should have opportunities," said the other source.

"Also, Western countries would be more than welcome to take part in this new tender," he added.

This may pave the way for global majors like Total SA , which leads the $1 billion Yadana gas project off the coast of Myanmar, to take part in the tender.

Last year, its chief executive said the French major would like to play a bigger role in Myanmar but wanted to see more concrete reforms.

Western governments have started rewarding Myanmar for releasing more than 600 political prisoners since last May, holding ceasefire talks with ethnic minority rebel groups and loosening tight media censorship.

The United States has agreed to upgrade diplomatic relations by exchanging full ambassadors after a two-decade absence and in February it gave the nod for Asian Development Bank and the International Monetary Fund to provide technical assistance to Myanmar.

The European Union this month temporarily suspended travel bans on top government officials and plans by April to review sanctions on Myanmar, which was ruled for nearly five decades by the military before a nominally civilian government took power in 2011. (Reporting by Niluksi Koswanage and Stuart Grudgings; Editing by Robert Birsel)

First Published: 2012-02-23 08:09:59
Updated 2012-02-23 10:51:47





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