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Posco Daewoo to invest $475mn in Myanmar gas field project

Myanmar gas field project, Posco Daewoo
POSCO DAEWOO, the operator of the Shwe gas field, currently sells gas from the Shwe block in Myanmar and neighboring markets.

Posco Daewoo Corp., the trading and energy development unit of South Korean steelmaker Posco, will invest 511.7 billion won ($475 million) in a gas field development project in Myanmar, the company announced Thursday.

The project will be jointly invested by India’s two state-run companies Oil and Natural Gas Corp. (ONGC) and GAIL, and Myanmar’s state-run Myanmar Oil and Gas Enterprise (MOGE) and Korea Gas Corp. Posco Daewoo would hold a 51 percent stake in the project.

The investment will go to the second stage development of a Myanmar gas field, which will connect additional production wells to the existing platform to maintain stable gas production, according to an official from the company.

Meanwhile, Nomura Securities projected a rosy outlook for Posco Daewoo, saying that it would maintain the growth momentum following the sound performance in the first quarter amid the strong oil and steel prices. It also added that the gas price in Myanmar would continue to rise and its steel transactions would increase as well.

As Posco Daewoo pledged a capex of 280 billion won this year and has no plan to embark on new drilling project, the securities firm estimated its dividend payout ratio would reach 30 percent with dividend yield of 3 percent.

Posco Daewoo announced last week that its operating profit in the first quarter on a consolidated basis exceeded the 150 billion won mark for the first time to stand at 150.2 billion won, up 36.15 percent from the same period last year. Sales jumped 18.12 percent on year to 6.2 trillion won, it added.

The Original Posted By Hwang Soon-min and Choi Mira/Maeil Business News Korea