Name : Songning Shen
Position : Chairman of the Board and Managing Director Canadian Foresight Group Limited (CFG)
Please tell our reader about yourself.
I was born in Shandong Province, China, near the city where Confucius was born. I finished a degree in Marine Geology from the Tongji University, a German-established higher education institution in Shanghai.
My first job was with China National Offshore Oil Corporation (CNOOC), where I worked for 10 years. I was part of the team that discovered the biggest oil deposit in Bohai Bay in China. In 1996, I left CNOOC to pursue further studies on petroleum engineering at the Norwegian University of Science and Technology (NTNU) in Norway. I migrated to Canada to pursue my dreams on exploring new frontiers. My wife is also an accomplished professional with a PhD in engineering who worked for the several super-majors and who was a part of the review committee for the Journal of SPE in Reservoir Engineering. We are blessed with two sons, the elder one is a lawyer and the other is still in school.
[paypal]
Can you share how your business involvement started?
When I migrated to Canada, I looked for opportunities also in the oil and gas industry. I was exposed to the oilsands which is abundant in Canada. Oilsands is a type of heavy oil. With my experience and formal education, I joined several companies drilling oilsands. I worked with Canadian companies such as Canadian Occidental which is pre-cursor to Nexen, Petro-Canada, Connacher and Petrolifera. I was remunerated handsomely as an exploration manager as I increased the profitability of those companies as reflected in double digit multiples of the initial share price in the stock market. This enhanced investor confidence and trust in me and I was encouraged to start a company.
Hence in 2006, together with CFG Vice-President Perla Woo and CFG Board of Director Michael Hibberd, weset up Sunshine Oilsands Ltd. Perla Woo, as an experienced engineer, had worked with all types of oil and gas reservoirs with all the biggest companies in Canada while Michael Hibberd, a leader in the Canadian and world oil industry, has been running many oil and gas companies that were listed in major stock exchanges in the world. Sunshine’s initial market cap was $200,000. Within two years after inception, Sunshine Oilsands cornered over 7% of the total oil sand leases in Canada. Sunshine had the biggest IPO in the world in spring 2012 when it debuted in the Hong Kong Stock Exchange with a market cap of $1.7 Billion at that time.
When did you first visit Myanmar and what are your impressions?
We first came over Myanmar in September 2012 to explore business opportunities. We met with ministers and other government officials from the Ministry of Energy and Ministry of Oil and Gas Enterprise (MOGE) and the Myanmar Investment Commission (MIC). We were impressed with the attitude of the people who were hospitable, very friendly and accommodating. After our visit, we were convinced it was worth investing and engaging in Myanmar. Together with other investors we set up CFG to be able to participate when the country opened the bidding for offshore oil and gas blocks in the Andaman Sea in late 2013.
In 2014, CFG, along with two partners, KMA group subsidiary and TRG ofAustralia, was awarded the M15 offshore block. In 2015, the Production Sharing Contract was signed with MOGE which represented the Myanmar government. CFG, with 80% interest of the block, is the operator. Our management and Board of Directors are composed of world top geologists and engineers plus seasoned businessmen, world class lawyers and global energy industry leaders.
What opportunities did you see in Myanmar?
The country is rich not only in oil and gas but also in other natural resources. Actually the country started early in the exploitation of onshore oil deposits. As early as the 1800’s Burma has been drilling its onshore oil, and up to now there is still continued oil production. The big opportunity now is in the offshore. Offshore drilling became in vogue in the 1980’s globally. Myanmar’s offshore oil and gas resources however were underexplored. Now the world attention is on Myanmar and its potential, here, this is the perfect time to explore and realize its full potential. Myanmar offshore has currently only four giant gas fields on production. The area for exploration is still wide and requires more players and investors.
So this is the focus of CFG?
Yes, CFG is primarily involved in exploring for gas based on our agreement with the government when we placed our bid and secured M15 block in the Andaman Sea. Based on initial studies the block has more than 20 TCF (Trillion Cubic Feet) prospective gas resources, enough to fuel the power needs of the country for the next 20 years. This huge deposit requires big investment and relevant technology to extract and bring it to the market, and this is what CFG’s commitment is to the country.
Where be the market of the company?
That would be negotiated with the government. If the government say the country will use the gas domestically, then we will sell it locally. Looking at the present trend, the government will be more disposed to selling the gas output to generate much needed revenue. According to the news, for the past 10 years, up to 40% of the government’s foreign income was generated from the gas exports and last year it even went as high as 60%.
Do you have other plans aside from investment in the oil and gas industry?
We like working with the Myanmar government and its people. We saw numerous business opportunities in Myanmar from the very beginning. We started with oil and gas, but we are also considering venturing in other industries like power generation and transmission, real estate, transportation and others. When the opportunity is there, we will respond accordingly.
Our group is composed of investors from Canada who wanted to engage Myanmar for long term. We are here to work with the Myanmar people and grow with them. We also look for participation in other industries where ourexpertise and our resources can be of use.
Do you have plans also to list in the Yangon Stock Exchange?
That is a possibility. We may also opt to list in the YSX in the future to enable the people to partake of the income that will be generated by our activities.
What is your global outlook on the oil and gas industry considering the slowdown of the Chinese economy?
The price of oil is at its lowest, but it does not mean it will hit rock bottom. I have a sense it will recover within the next 1-3 years. For the past several years there were no new investments in the industry because thin profits discouraged companies to upgrade their facilities and even venture into new areas. But the demand is not slowing down. Indeed there is a slowdown in the global economy, but we cannot prevent economic growth from happening. And with economic growth alongside increase in population, there will also be increase in demand. With a consistent demand and a low output, price will eventually recover and move up significantly.
Are there issues related to the oil and gas industry?
I think the main issue is the misconception on the environmental impact of the industry. I would like to assure the people that the technology in extracting resources from the ocean has improved tremendously over the years. Globally, Canada has one of the highest standards in all aspects of business conduct and operations including environmental protection. As a Canadian company, our company will uphold these ideals and will follow the rules and procedures carefully so as minimize environmental impact and reduce footprint.
What are the challenges in dealing with the government?
All the government officials we have met have been very open, transparent, and helpful in their dealing with us, so we have no major problems associated with dealing with the government.
When given the opportunity, what can you advise to the government?
We could say that for the offshore exploration, Myanmar is just starting. Compared to India that has already more than 100 offshore oil and gas fields, Myanmar offshore have only 4 producing gas fields. With the great opportunities we have seen in offshore Myanmar, the government should adopt best practices from foreign jurisdictions to accelerate growth rather than creating something new from scratch. CFG wants to be a channel to connect Myanmar to governmental agencies and institutions in Canada for sharing experiences and learning from each other.[/paypal]
