* Woodside delays further drilling in Myanmar gas fields - sources
* Drilling results have come out below expectations - sources
* Woodside to decide further action next year
By Shoon Naing and Antoni Slodkowski
YANGON, Oct 16 (Reuters) - Australia’s Woodside Petroleum and its partners have deferred gas exploration plans in Myanmar until 2018 after some disappointing drilling results, according to four people familiar with the situation.
Woodside and its partner, French oil and gas major Total , have targeted Myanmar as a key source of growth, as it is rich in gas and sits next to rapidly growing markets, including Thailand and China.
Woodside said in August it planned to drill wells in two exploration blocks off the coast of Myanmar in the second half of this year. It said both blocks could hold “multi-trillion cubic feet” of gas.
But the Australian company cancelled a tender for seismic work 10 days ago, after drilling at Blocks A-6 and AD-7 did not hit as much gas as hoped, the sources said.
“They drilled (in A-6)... and found the gas but had to stop now because the company needs to evaluate commercial viability of the project... The results from two wells are not sufficient to decode whether the project is commercially viable or not,” said a senior government official in Myanmar.
The official said Woodside “didn’t find the gas” they had expected in Block AD-7, so decided to re-appraise the situation and decide on further action next year.
Woodside said the drilling had been completed, but declined to comment on whether a seismic tender had been cancelled. The company is due to give a quarterly update on Thursday.
“Woodside has completed all of its planned drilling for 2017 and is continuing planning for 2018 activities, consistent with the advice provided in Woodside’s 2017 half-year report,” a Woodside spokeswoman said.
Woodside Chief Executive Peter Coleman told analysts in August the company expected to know after drilling in Block A6 that month whether the field was commercial.
“We’ve already had some initial discussions on it, but assuming a success case on the current well in Block A6, we’ll be ready to be inputting development proposals in front of government as to the pathway forward,” Coleman said then.
A person involved in bidding to carry out seismic exploration work said Woodside had sent a letter in early October cancelling the tender as it had failed to receive joint venture approval, and was deferring the work to the second or third quarter of 2018.
The person declined to be named as the tender process is confidential.
Woodside’s partners in Block A-6 off Myanmar’s southwest coast are France’s Total and local firm MPRL E&P. Total did not respond to requests for comment.
Its partner in Block AD-7 is South Korea’s Posco Daewoo Corp. Posco Daewoo said there had been no change to plans for AD-7.
The sources contacted for this article said the delays were unrelated to the violent refugee crisis of Rohingya Muslims fleeing Myanmar, for which the government has come under international criticism.
Reporting by Antoni Slodkowski and Shoon Naing in YANGON and Sonali Paul in MELBOURNE; Additional reporting by Gavin Maguire in SINGAPORE and Jane Chung in SEOUL; Writing by Henning Gloystein