The contract covers an offshore area known as Block A5, which lies 200 kms (124 miles) northwest of Yangon and spans more than 10,600 square kilometres, the company said in a statement issued late on Tuesday.
The PSC comes a year after Chevron was granted exploration rights to block A5 and is the first to come with a majority share for the U.S. explorer.
“The exploration of this block is aligned with Chevron’s long-term strategy to find and develop resources that will help meet the growing energy needs in the Asia Pacific region,” said Brad Middleton, managing director of Chevron Asia South Business Unit.
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Chevron’s subsidiary Unocal Myanmar Offshore Co. Ltd. will operate the block with a 99 percent interest, while local company Royal Marine Engineering Co. Ltd. holds the remaining share.
The U.S. oil and gas explorer has a 28.3 percent stake in a PSC to produce natural gas from the Yadana and Sein fields, within Blocks M5 and M6, in the Andaman Sea.
Chevron also holds a 28.3 percent share in a pipeline company that transports natural gas to the Myanmar-Thailand border for delivery to power plants in Thailand.