China’s Troublesome Little Brother

By AUNG ZAW
The Irrawaddy News
SEPTEMBER, 2009 - VOLUME 17 NO.6

Behind displays of friendship, Beijing is showing signs that it is losing patience with Burma’s politically inept ruling generals

When Vice Snr-Gen Maung Aye, the second most powerful figure in Burma’s ruling junta, led a high-level delegation to Beijing in mid-June, China’s state-run Xinhua news agency dutifully reported that the visit—the general’s third in six years—was aimed at strengthening friendly and cooperative ties between the two neighboring countries.

Chinese Vice President Xi Jinping, left, holds a welcoming ceremony in honor of Gen Maung Aye, right, vice-chairman of Burma’s ruling junta at the Great Hall of the People in Beijing on June 16, 2009.
(Photo: www.english.cpc.people.com.cn)

Behind the scenes of the outwardly amicable visit, however, the story was not so simple. According to businessmen close to the regime in Naypyidaw, before departing for Beijing, Maung Aye complained that China was meddling in Burma’s affairs. A former commander of the Burmese army’s northern region who once fought several fierce battles against the Chinese-backed Communist Party of Burma in the 1970s and 1980s, Maung Aye has never really trusted Beijing. Now, he grumbled, Chinese leaders were trying to tell Naypyidaw how it should deal with Aung San Suu Kyi, who was facing imprisonment on charges of violating the terms of her house arrest.

On the Chinese side, too, feelings were far more ambivalent than the Xinhua report would have us believe. Since the 2004 ouster of former Prime Minister Gen Khin Nyunt, Beijing’s relations with the Burmese regime have been on a less secure footing. Unlike the relatively open-minded Khin Nyunt, the current leadership in Naypyidaw consists entirely of dyed-in-the-wool xenophobes. Even a friendly word of advice was likely to strain the relationship carefully built up over the past two decades.

In the end, Maung Aye’s visit passed without incident. Although Beijing had earlier joined Burma’s other neighbors in calling for the release of Suu Kyi, and Chinese Premier Wen Jiabao told the Burmese regime’s No 2 that he hoped the military would help to promote democracy in Burma, the pro-democracy leader herself was not mentioned directly in discussions between the two sides. Significantly, however, news of the international outcry over the trial of Suu Kyi aired on Beijing television during Maung Aye’s visit, perhaps sending a message that world opinion could not be ignored, even in Communist-controlled China.

Despite such subtle hints, however, it is clear that Beijing is not about to depart from its long-held policy of noninterference in Burma’s political affairs—a policy that it has maintained even under more trying circumstances.

Chinese workers seal the pipeline along the 1,272-kilometer transnational natural gas pipeline in Luoyang in central China’s Henan Province on Dec 11, 2008. China’s demand for oil and gas has expanded rapidly in recently years to fuel its double-digit economic growth, as the country imported nearly 200 million tons of oil in 2007, up more than 10 percent from 2006. (Photo: AFP)

When Burmese troops and security forces were killing monks on the streets of Rangoon in September 2007, provoking international outrage, Beijing made it clear that it wasn’t going to join in the chorus of criticism. Instead, it reacted by issuing an anodyne statement calling on all parties to exercise restraint—and for the rest of the world to mind its own business. Soon after the dust settled, the Burmese regime’s leader, Snr-Gen Than Shwe, returned the favor by sending an envoy to Beijing to explain the situation. And so the whole episode was reduced to a mere bump in the road of Sino-Burmese relations.

It came as no surprise, then, that when a Burmese court sentenced Suu Kyi to a further 18 months under house arrest on August 11, Beijing did not deviate from its script.

“International society should fully respect Myanmar’s [Burma’s] judicial sovereignty,” said a spokesperson for the Chinese foreign ministry, adding that Beijing would not back any calls for UN action against the Burmese regime. Two days after the sentence was announced, the UN Security Council, of which China is a permanent member with veto powers, expressed “concern” over the court’s ruling and reiterated its call for a “genuine dialogue” aimed at achieving national reconciliation.

During Maung Aye’s visit to China, Burma’s state-run press noted with evident satisfaction that Beijing is the regime’s staunchest defender on the international stage. But why has China remained such a faithful patron of this miscreant regime? The answer, quite simply, is that Burma is a resource-rich country with the means to help China satisfy its hunger for energy and raw materials.

Maung Aye’s visit highlighted this key aspect of the bilateral relationship. While he was in China, the two countries signed three documents—an agreement on economic and technical cooperation, a Memorandum of Understanding (MoU) on the development, operation and delivery of electricity from hydropower projects in Maykha, Malikha and upstream of the Irrawaddy-Myitsone river basin, and an MoU relating to the development, operation and management of the Burma-China crude oil pipeline project.

Around the same time as Maung Aye’s trip, Burma’s Ministry of National Planning and Development released a report showing that foreign investment in Burma had jumped from $172.7 million in the 2007-2008 fiscal year to $984.9 million in 2008-2009. The ministry said 87 percent of the total invested in Burma came from China.

China’s investment in Burma is focused mainly on energy and natural resources—hydropower, mining and oil and gas projects. Construction of the pipeline, which will transport gas and oil from the port town of Sittwe on the Arakan coast to China’s landlocked southwestern province of Yunnan, is set to begin in September.

In exchange for access to Burma’s resources and strategically important ports, China provides not only diplomatic cover, but also soft loans for the regime and weapons for its oversized army. It hopes in this way to ensure that Burma remains a part of China’s long-term strategy for economic growth. Although Beijing professes to refrain from interfering in Burma’s political affairs, it is clearly determined to protect its interests by providing the regime with the military means to maintain stability. If the junta proves incapable of containing unrest, Beijing will reconsider its backing; but until then, the generals can count on Chinese support.

China has little interest in promoting Burma’s democratization, but it has been happy to play along with UN efforts to end the country’s political stalemate. When UN Secretary-General Ban Ki-moon traveled to Naypyidaw in June, Chinese officials said they welcomed the move. But when the regime refused to allow Ban to meet with Suu Kyi, China’s deputy UN ambassador, Liu Zhenmin, said it was “understandable” under the circumstances. He also said that the Burmese regime should be treated with less arrogance and prejudice, and ruled out any possibility of Beijing using its influence to persuade the regime to change its ways.

By the time Maung Aye returned from his visit to China, his misgivings about Beijing’s reliability as an ally appeared to have vanished. Soon after his trip, he visited the Sino-Burmese border and announced plans to build an international airport there. He also reportedly told local businessmen and accompanying ministers that if Burma’s relationship with China continued to grow, Burma would have no need for Western—particularly US—assistance.

This must have been music to Beijing’s ears, but it seems to have done little to allay Chinese concerns about potential US rivalry for influence in Burma. Despite its policy of isolating the Burmese regime, Washington has played a very active role in Burma, primarily through its support for Suu Kyi and pro-democracy groups inside and outside the country. Chinese officials who regularly travel to Thailand to meet exiled Burmese groups often ask them questions about the support they receive from the US.

To offset Washington’s role as the primary sponsor of the democratic opposition, China has expanded its network of contacts within the exiled dissident community. Chinese officials from various government departments based in Yunnan Province, which borders Burma, have been meeting with exiled Burmese groups in Thailand with increasing frequency. More remarkably, they have even allowed conferences and seminars on Burmese issues to take place in China. This is something the Chinese have learned from watching exiled Burmese civil society groups operating in Thailand.

For their part, Burmese dissidents realize that although they already have strong political backing from the West, they also need to lobby China to reconsider its policy toward the repressive regime. The National League for Democracy (NLD), Burma’s main opposition party, has sent several letters to the Chinese embassy in Rangoon, signaling that it sees China as a potentially positive influence. However, there has been no official response to these letters, which were signed by NLD Chairman Aung Shwe, and which expressed a desire to forge a “fraternal relationship” with China and asked for Beijing’s support in Burma’s stalled national reconciliation process.

This lack of a response contrasts starkly with China’s overtures to the NLD in 1990, when the party had just won a landslide victory in Burma’s last democratic elections.

Chinese leaders were among the first to congratulate the NLD on its convincing win and called on the Burmese regime to release Suu Kyi from house arrest. But when it became clear that the junta had no intention of honoring the results of the election, China changed its tune, remarking on the military’s role in winning Burma’s independence from colonial rule—implying that this gave the junta a mandate to hold onto power.

Nearly 20 years later, Beijing may have few regrets about its decision to throw its weight behind the junta, but it is growing increasingly wary of the cost of backing a regime that has failed to resolve any of the potentially explosive issues that continue to threaten stability on China’s doorstep. As Chinese analyst Wen Liao wrote in a recent issue of Foreign Policy magazine, Burma is an unreliable client for China. The fact that the Burmese regime is morally reprehensible is not an issue for Beijing, but the overwhelming evidence of the ruling generals’ incompetence is a serious cause for concern, Wen wrote.

Beijing is not only worried about being dragged through the mud every time Burma’s rulers commit a new outrage. Naypyidaw’s secret missions to Pyongyang and its shady nuclear ambitions are emerging as a new threat to regional stability, and Burma’s restive ethnic ceasefire groups, many based along the Sino-Burmese border, are becoming a major headache for Beijing. As Wen wrote, despite Burma’s importance as part of China’s so-called “string of pearls” policy, which attempts to build naval and intelligence bases around the Indian Ocean, the benefits of those strategic assets have come at a price.

While Washington’s review of US policy on Burma has attracted considerable attention in recent months, perhaps it is time to ask if Beijing is also re-examining its approach. According to Wen, Chinese leaders are now considering the possibility that Suu Kyi’s party may be a more reliable partner for long-term bilateral cooperation after all.

It seems unlikely at this stage that Beijing will actually make another dramatic shift like it did in the 1980s, when it withdrew its all-out support for the Communist Party of Burma. But don’t be surprised if Beijing begins to introduce subtle policy changes that could undercut the alliance that has been the junta’s main lifeline for the past two decades.

READ MORE---> China’s Troublesome Little Brother...

Daewoo invest $5.6 billion in Burma gas

(DVB)–South Korean company Daewoo International is waiting for the go-ahead from the Burmese government to invest nearly $US5.6 billion in Burma's gas fields, with the produce destined for China.

If approved, the deal will see Daewoo supplying the China National Petroleum Corp (CNPC) over the course of 30 years with around seven percent of the country's current gas consumption, although this is expected to grow rapidly.

Burma has huge offshore natural gas reserves in the Bay of Bengal which already cater for much of Thailand's energy needs.

Advocacy groups have complained that the vast majority of Burma's natural energy is being shipped out of the country, despite many of the major cities suffering frequent blackouts.

Daewoo will be leading a consortium of companies, which includes India's Oil and Natural Gas Corp and GAIL company, the Myanmar Oil & Gas Enterprise, and the Korea Gas Corp.

The project includes the construction of 2,800 kilometer oil and gas pipelines, known as the Shwe Gas Project, running from Burma's western Arakan state to China's southwestern Yunnan province.

Until now China has relied on the congested Strait of Malacca, between Singapore and Indonesia’s Sumatra peninsular, to transport oil from the Middle East to its energy-hungry population. According to Reuters, Burma will be able to tap the pipelines once they are in operation.

In June the Korean government rejected a complaint from two environmental advocacy groups, EarthRights International (ERI) and Shwe Gas Movement, that allegedly exposed human rights abuses surrounding the project.

China and Korea are two of only a handful of countries that still invest substantially in Burma, with China being its main trading partner and political ally.

Burma is subject to sanctions from a number of Western countries, including the United States and European Union, although these do not block investment in Burma's natural energy.

The EU recently ratcheted up its sanctions package on Burma, following the detention of opposition leader Aung San Suu Kyi earlier this month.

The United States is currently reviewing its policy towards Burma, following comments from some senior officials, including Secretary of State Hillary Clinton, that sanctions had failed.

Reporting by Francis Wade

READ MORE---> Daewoo invest $5.6 billion in Burma gas...

Total Chief: Critics Can ‘Go to Hell’

Christophe de Margerie, CEO of Total. (Photo: Bullsoil.com)

By THE IRRAWADDY

The CEO of the French energy giant Total said critics of the company’s operations in Burma “can go to hell,” according to an interview published by Newsweek magazine on August 3.

“I am bringing gas to Thailand. Bangkok was the world’s most polluted city. They switched from oil fuel to gas. Bangkok is clean now. We are proud of being part of this,” Christophe de Margerie, CEO of Total, told the US weekly magazine.

Thailand pipes about one billion cubic feet of gas per day from Burma’s offshore reserves in the southeastern Andaman Sea through the controversial Yadana gas pipeline, which human rights campaigners say has been a site of widespread abuses since its inception.

Total has been involved in the Yadana project since the 1990s, working in partnership with the US-based Unocal (now a wholly owned subsidiary of Chevron), Burma’s state-owned Myanmar Oil and Gas Enterprise and Thailand’s PTT Exploration and Production Co.

Total and its partners have long been accused of turning a blind eye to serious human rights abuses committed by Burmese security forces guarding the pipeline, including forced labor, land confiscation, forced relocation, rape, torture and murder.

A brutal crackdown on monk-led protests in 2007 and the current trial of Burmese pro-democracy leader Aung San Suu Kyi have brought renewed pressure on investors in Burma’s gas and oil sector, the single largest source of hard currency for the ruling regime. Burmese pro-democracy activists say energy companies should think twice about their investments in Burma.

“Today, [rights campaigners] are trying to tell us you have no right to speak. They can go to hell. If you want to ask somebody, don’t ask Total. Ask the government of Thailand, which buys Burmese gas,” de Margerie said.

“Or ask the government of India why they have companies investing in Burma, when we froze investment. Why is South Korea, ally of the United States of America, investing in Burma? Why Total?” he added.

However, de Margerie’s claims that Total has been unfairly singled out ignores actions taken against other major investors in Burma’s energy industry.

Recently, US-based NGO EarthRights International (ERI) filed a 43-page complaint to the Organization for Economic Cooperation and Development (OECD) calling for an investigation of the South Korean government’s respect for OECD guidelines.

The complaint, made on behalf of the Shwe Gas Movement and nine Korean-based organizations, is related to investments in Burma by Daewoo International and the Korea Gas Corporation.

Complaining that “Total is a punching bag while other companies invest without criticism is simply untrue,” said ERI project coordinator Matthew Smith, speaking to The Irrawaddy on Tuesday.

“He (de Margerie) claims that Total is proud to provide natural gas to Bangkok but at the same time he tries to deflect negative criticism to Thailand. This strategy is consistent with the way Total has handled most of the negative outcry about its presence in Burma: deny and reject any and all negative criticism.

“Total’s project has generated billions of dollars for the military regime from the peoples’ natural resources. It’s dubious at best to claim that is a positive thing for the country,” Smith said.

“Elsewhere Total has touted respect for fiscal transparency but at the same time it has not published the payments it has made to the Burmese regime—that raises serious questions,” he added.

READ MORE---> Total Chief: Critics Can ‘Go to Hell’...

Is China Playing Safe with its Burma Pipeline Plan?

By WILLIAM BOOT
The Irrawaddy News

BANGKOK—China appears to be making alternative plans in case its Middle East oil transshipment port and pipeline project in Burma fails because of regime change.

The Chinese state-owned oil and gas conglomerate China National Petroleum Corporation (CNPC) is spending at least US $1.5 billion to use Burma as a conduit for oil shipments from the Middle East and Africa. But as a backup in case this scheme has to be abandoned it is now also investing in a multibillion dollar oil project in northern Malaysia.

The CNPC is to play a central role in a regional oil processing and transshipment hub link between the Middle East and China on the northwest coast of Malaysia facing the Indian Ocean just like the port development at Kyaukpyu on Ramree Island on the central Burma coast.

Crude oil from Saudi Arabia and probably also Iran will be shipped to a $10 billion refinery on reclaimed land at Yan in Malaysia’s Kedah state close to the border with southern Thailand.

The refinery will have a capacity of 350,000 barrels a day and CNPC will take at least 200,000 bpd.

The chief Malaysian developer, Merapoh Resources Corporation, says the Chinese are likely to become major shareholders. Industry reports suggest that one of the chief financiers of the Yan project, Hong Kong-based equity procurers Beijing Star, is in fact acting as a proxy for CNPC.

This new plan involving Chinese investment revives a Malaysian idea that rose briefly two years ago and then sank without trace, Bangkok-based oil industry consultant-analyst Sar Watana told The Irrawaddy.

In 2007, Malaysia was looking for financial backing for a west coast transshipment port and cross-country pipeline. The main beneficiary would have been China, but the Chinese seemed to lose interest as the Burma pipeline possibility grew.

The re-emergence of this project with China closely involved implies that the Chinese are not going to rely solely on the Burma transshipment scheme.

Both projects short-cut the long sea journey tankers heading for China’s south and east coasts from north Africa and the Middle East currently have to make via the Malacca Strait and Singapore at the bottom of the Malaysian peninsula. More than 60 percent of China’s oil imports pass through the strait.

China has not disclosed how much crude oil it plans to transship through Burma, but the deep-draught port on Ramree Island will be able to handle the biggest bulk tankers. Oil will be pumped 1,200 kilometers in unprocessed form to a refinery in Kunming, capital of neighboring Yunnan province.

There has been speculation that further pipelines inside China will move some of the oil deeper into China to other provinces.

Work on the Burma oil pipeline is supposed to begin before the end of this year, according to Chinese media reports, and be operational by 2012.

The Malaysian refinery at Yan is scheduled to be completed in 2014.

Another Chinese state company, China National Overseas Oil Corporation, had reportedly been involved in Malaysia’s 2007 oil transshipment plans.

According to Malaysia’s Merapoh Resources Corporation, 40 percent of the Yan project will be owned by Beijing Star of Hong Kong.

Beijing Star chairman Li Feng Yi was quoted by The Star newspaper in Malaysia as saying his firm will sell its share in the finished Yan refinery to CNPC.

From a commercial point of view it doesn’t seem to make sense for China to be involved in two major oil trans shipment schemes in fairly close proximity of Southeast Asia, says Collin Reynolds, another industry analyst in Bangkok.

But these Chinese state oil-gas giants have very, very deep pockets, and their primary purpose is supply, not cost, Reynolds told The Irrawaddy.

It begins to look as though China is hedging its bets. Burma is very much a client state right now, with Beijing able to manipulate the military junta for its own ends.

READ MORE---> Is China Playing Safe with its Burma Pipeline Plan?...

Energy Meeting in Mandalay

By The Irrawaddy

Thailand’s Energy Minister Wannarat Charnnukul will emphasize his country’s strength as a regional hub of alternative energy at a meeting with energy ministers from Asian +3 and Asean +6 in Mandalay on July 29-30, according to a report in the Thailand-based news service The Nation on Monday.

Thailand will join the Asean energy action plan during 2010-2015, which highlights cooperation in seven areas including clean coal technology, the regional power transmission grid, gas pipelines, energy conservation, recycliable energy and nuclear power.

Minister Charnnukul also said that Thailand would also seek a bilateral talk with Burma on further cooperation in natural gas investment, according to the report.

According to a source close to the Thai ministry official, Thailand is concerned that Burma’s gas fields will be monopolized by Chinese state oil firms.

Thailand imports over 50 percent of Burma’s gas, which the French energy conglomerate Total extracts from the Yadana gas field in the Andaman Sea.

Total is one of the world’s six biggest so-called “supermajor” oil and energy companies and is the only large European business still operating in Burma.

In May, the French government said that if tougher trade curbs were introduced against Burma over the regime’s treatment of Aung San Suu Kyi, it would have damaging repercussions for one of France’s biggest companies and possibly for Southeast Asia.

French Foreign Minister Bernard Kouchner also warned that any pullout by Total would have a limited effect because Chinese state oil firms would be quick to move in.

The EU has urged Burma’s neighbors—notably China and India—to also threaten sanctions to persuade the regime to halt its political repression.

The 25 EU countries are barred from importing timber, minerals, gems and metals from Burma, and prohibited from exporting weapons and weapons-related equipment. Various restrictions on junta members are also in place.

However, both India and China continue to expand their business interests with the Burmese junta and supply it with weapons.

READ MORE---> Energy Meeting in Mandalay...

Oil and Politics Don’t Mix

By YENI
The Irrawaddy News
JULY, 2009 - VOLUME 17 NO.4

The growing revenues from Burma’s oil and gas resources provide financial support to the Burmese military to the detriment of Burma and her peoples

AS the Burmese regime increases its isolation of opposition leader Aung San Suu Kyi and the National League for Democracy, the United Nations and Western governments, especially the US and the European Union, remain steadfast in applying diplomatic pressure on the junta.

Burma’s stubborn military leaders can shrug off Western pressure, however, knowing they can rely on support from such friendly and powerful neighbors as China, India and some Southeast Asian countries, most of which have significant trade and investment links with Burma and which are inclined to follow an engagement-oriented policy towards the regime.

(Map: The Irrawaddy)

However, both camps—supporters of sanctions and proponents of engagement—acknowledge failure in their efforts to influence Burma’s military leaders. That is why US Secretary of State Hillary Clinton said in February that both sanctions applied by the US and the European Union and the policy of constructive engagement by the Association of Southeast Asian Nations (Asean) and Burma’s neighbors were not working.

So the question remains: who can influence the Burmese generals to listen to world opinion?

Many observers said that a start could be made on ending ongoing human rights abuses if oil and gas companies operating in Burma used their influence with Burma’s ruling junta, the State Peace and Development Council (SPDC). They said the global and regional energy companies involved in Burma’s oil and natural gas sector are funding the Burmese dictatorship.

It is clear that the military receives the largest share of the official budget—with the help of natural-gas revenue, Burma’s foreign-exchange reserves have reached US $3.6 billion and are expected to increase—which ends up in the pockets of the ruling generals and their cronies, or is allocated to their pet projects. The latter include the new administrative capital at Naypyidaw, the Yadanabon cyber city project between Mandalay and Maymyo, and a nuclear research reactor (as announced by Russia’s Federal Atomic Energy Agency in 2007).

After the latest action against Suu Kyi, the regime’s criminal mismanagement of Cyclone Nargis relief and its brutal crackdown on the September 2007 demonstrations, Burma activists are calling for energy enterprises to carefully consider their priorities before entering deals with the regime.

Matthew Smith, the project coordinator of EarthRights International, an environmental and human rights group with offices in Thailand and Washington, believes there are solid business reasons for energy companies to think twice about accepting Burmese contracts. “Financing the Burmese regime in this way can only reflect poorly on a company’s reputation, and that will ultimately affect their bottom line and ability to capitalize on deals in the future,” he says. “It’s simply bad business.”

However, US-based Chevron and France’s Total—both leading investors in Burma’s oil and gas sector—have declared that they will not pull out of the country, arguing that even if they did withdraw they would be replaced by other competitors. Observers agree that power-hungry neighboring countries, especially China and India, are eager to do business with Burma, hoping to secure some of the fuel supplies that their surging economies need.

Speaking as EU countries mulled action against the junta over its treatment of Suu Kyi, France’s foreign minister, Bernard Kouchner, told members of the French parliament in May that any decision to pull out their national energy giant Total would have serious consequences for the region. Total—France’s largest and most profitable company—has been a major investor in Burma’s Yadana gas field since 1992, and production from Yadana represents 60 percent of Burma’s gas exports to Thailand.

“If we take a firm stand—this would have to be decided at the highest level of state, and we’re going to review the situation in the coming days—that would mean cutting off gas supplies to a good part of the Burmese population, not to mention the city of Bangkok, since the gas also goes to Thailand,” Kouchner said in May, also warning that if Total was forbidden from working in Burma’s natural gas fields, Chinese firms would be quick to pick up the slack.

A pull-out by Chevron and Total could also backfire in other ways, according to Derek Tonkin, the former British ambassador to Thailand, who is now the chairman of the NGO Network Myanmar. He suggested that lower wage costs incurred by Asian operators could result in more money accruing to the Burmese regime, as well as there being fewer safeguards for both local people, who currently benefit from Chevron/Total’s welfare and security measures where none would exist under a Burmese army security team, and for the environment.

Meanwhile, a booming China, with its voracious appetite for oil and urgent need for security of oil supplies, has signed a deal with the Burmese military junta to build cross-border oil and gas pipelines more than 1,930 kilometers (1,200 miles) in length from Kyaukpyu Port on the Bay of Bengal through Burma to southwest China.

China will use the planned pipelines for importing natural gas and oil from the Middle East and Africa, which currently supply 85 percent of China’s demand for oil, helping China to reduce oil shipping through the Malacca Strait. As part of the current strategic and economic move, China has now secured a 30-year deal from the junta for natural gas tapped off the Burmese coast.

However, some Burma experts argue that Burma’s ultranationalist generals are not merely puppets of China and that Chinese influence on Burma has been exaggerated. While the Burmese military has used its relationship with China to strengthen its hold on the country, it is becoming increasingly concerned about China’s growing economic domination and will be worried that tougher Western sanctions could push the country’s biggest gas field into Chinese hands, argued economics professor Sean Turnell of Macquarie University in Sydney, Australia.

“If China was to grab this [Total operation] ahead of the big Shwe gas project already bottled up by them, Burma’s economic vassal state destiny would be almost complete,” Turnell told The Irrawaddy. “You don’t want to hand over pricing power of your most important export commodity to your principal customer. Yet this is what would happen if Total divested and China took its place. It would be a monopoly buyer able at will eventually to push down the prices Burma gets for its gas,” Turnell said.

However, Burma’s gas reserve—the Shwe field alone might be up to 14 trillion cubic feet—is also attracting other energy-hungry neighbors and investors. India is keen on exploiting Burma’s huge oil and gas resources. In 2007, India signed a production deal for three deep-water exploration blocks off the Arakan coast as part of the Shwe Gas Project, a project of the regime-owned Myanmar Oil and Gas Enterprise (MOGE) in partnership with Daewoo of South Korea (60 percent), the state-owned Korean Gas Corporation (10 percent), India’s state-owned Oil and Natural Gas Corporation (ONGC) (20 percent) and the Gas Authority of India Ltd. (GAIL) (10 percent).

The Burmese generals know very well that they have no shortage of friends. Current investors in Burma’s oil and gas industry include companies from Australia, the British Virgin Islands, China, France, India, Japan, Malaysia, Singapore, South Korea, Thailand, Russia and the US.

“When Premier Oil withdrew, partners Petronas (the Malaysian oil firm) took over Premier Oil’s stake and then subdivided this among Nippon Oil and Thai PTTEP,” Tonkin noted. He said it is normal contractual practice for existing partners to have the right of first refusal, so that in the event of a Total or Chevron withdrawal, MOGE and Thai PTTEP would be offered the stake first. “In short, China could be the last in the queue of applicants, after Thailand (first), then Malaysia, India, Japan, South Korea, Russia and Indonesia.”

Advocates of sanctions have pointed to the success of the sanction model against apartheid-era South Africa. In the case of South Africa, sanctions were imposed by a broad coalition of its major trading partners including neighboring countries. Burma’s energy-hungry neighbors and the global and regional oil companies dealing with the regime have been the major lifeline keeping the military in power.

Gas revenues have been supporting the country’s military junta, who are misusing it, turning the gas into a “resources curse” for Burma, Turnell has suggested. The Australian economist noted in a recent report for Macquarie University’s Burma Economic Watch that large natural gas reserves offered an opportunity for the country to lift itself off the economic floor, where it was already languishing before Cyclone Nargis hit. Instead of allocating its budget to Burma’s needy public sectors such as health and education, which he noted are almost invisible in the country’s public accounts, he said “they seem to be earmarked for the type of wasteful and grandiose spending projects that have been a characteristic of Burma’s military regimes for nearly five decades.”

READ MORE---> Oil and Politics Don’t Mix...

Myanmar Oil Markets Investment Opportunities, Market Analysis and Forecasts to 2020

(TMCNET) -Summary This profile is the essential source for top-level energy industry data and information. The report provides an overview of the oil industry in Myanmar. It details the market structure, regulatory environment, infrastructure and provides historical and forecasted statistics relating to the supply/demand balance for the industry. It also provides information relating to the oil assets (oil fields, refineries, pipelines and storage terminals) in Myanmar. The report also analyses the fiscal regime relevant to the oil assets in Myanmar and compares the investment environment in Myanmar with other countries in the region. The profiles of the major companies operating in the oil sector in Myanmar together with the latest news and deals are also included in the report.

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- Do deals with an understanding of how competitors are financed, and the mergers and partnerships that have shaped the market.

- Identify and analyze the strengths and weaknesses of the leading companies in the country.

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READ MORE---> Myanmar Oil Markets Investment Opportunities, Market Analysis and Forecasts to 2020...

Slowdown Strains Myanmar Economy

Scarce Jobs, Dwindling Remittances and Limited Credit Strain Economy Further Amid Tension Over Dissident's Trial

YANGON, Myanmar (wsj)-- Myanmar's financial system and economy are largely cut off from the outside world -- but not the global economic crisis.

As the country's military junta wraps up its trial of dissident Aung San Suu Kyi, conditions in the capital and rural areas illustrate the effects of the slowdown on this isolated nation's already-tenuous economy. Key sectors such as agriculture and tourism are reeling, and business in the commercial center of Yangon has dwindled, residents and economists say.

Credit has dried up, remittance income is falling as thousands of workers returning from abroad are discovering that jobs are scarce.

"People don't have money these days, and if they do have it, they don't spend it," says Kyi Kyi Win, a saleswoman at a store in Yangon. Last year, the shop was selling $300 to $400 in merchandise a day, she says, but now it's selling less than $100 a day.

Myanmar's economic health is critical now, as discontent over Ms. Suu Kyi's fate spreads. The 63-year-old Nobel laureate is accused of violating the terms of her house arrest, imposed by the government six years ago, by allowing an American well-wisher to visit her residence without state approval.

Some residents say they hope the verdict -- which is widely expected to be "guilty," potentially resulting in up to five years in prison for Ms. Suu Kyi -- could ignite protests and destabilize a regime that has ruled the resource-rich nation since the 1960s.

The trial has drawn international outrage, which Myanmar's leaders addressed on Thursday. According to Reuters, Deputy Foreign Minister Maung Myint, at a meeting in Cambodia, accused critics of meddling in the country's affairs and denied that the prosecution was a political or human-rights issue.

Maung Myint, Myanmar's deputy foreign minister, accused critics of meddling in the country's affairs.

There is little indication of serious unrest now. But the relatively calm circumstances could change if the verdict is seen as harsh. Ms. Suu Kyi is widely viewed as Myanmar's most legitimate leader after her political organization, the National League for Democracy, won Myanmar's last elections in 1990; the government ignored the results.

Economic distress has played a role in past unrest. The last major protests in September 2007, which were crushed by the military, were ignited largely by a surge in fuel costs.

Myanmar's economy has long suffered from high unemployment, minimal foreign investment and crumbling infrastructure. With few successful domestic industries, the country relies heavily on sales of natural gas, timber and other commodities to the few countries that continue to do significant business with the regime, notably China, Thailand and India.

U.S. and European sanctions in place for years prevent all but a few Western companies from operating there. Commodities prices have collapsed over the past year, and with few links to external capital markets, Myanmar is unable to raise cash for new lending.

Conditions in Yangon are especially difficult. Fewer than 300,000 of its six million residents have mobile phones and power blackouts are becoming more common and many taxis are so worn that the road is visible through holes in the floorboards. Abandoned colonial buildings rot in the monsoon weather, with vines growing out of broken red-brick windows.

Myanmar doesn't provide timely economic information. Official data indicate the economy grew 10% or more a year since 2000, but the Asian Development Bank and private analysts say such data likely are exaggerated, with actual growth probably less than half the government's estimates and headed lower this year.

The situation isn't all bad. Lower commodities prices have helped ease inflation, which hit 30% in recent years, and weaker demand for imported goods has improved the country's trade balance. Some shops, such as computer dealers, that cater to Myanmar's wealthy elite, say business is holding up.

Government finances are in relatively good shape. With the help of natural-gas revenue, Myanmar has more than $3 billion in foreign-exchange reserves, and has improved tax collection, the Asian Development Bank says.

But natural-gas revenue has fallen by as much as 50% this year, says Sean Turnell, a Myanmar expert at Macquarie University in Sydney. In addition, the past year has been disastrous for agriculture, which accounts for about 45% of Myanmar's gross domestic product.

Cyclone Nargis, which killed 135,000 people a year ago, wiped out much of the equipment and livestock in Myanmar's southern rice bowl, and many indebted families have been unable to replace both. Tourism is suffering, too. Arrivals have declined since 2006, according to local media reports and travel agencies.

READ MORE---> Slowdown Strains Myanmar Economy...

Chevron Shareholders Support Teamsters Country Selection Criteria Proposal

To: LABOR EDITORS

Contact: Galen Munroe of International Brotherhood of Teamsters, +1-202-624-6904, gmunroe@teamster.org

Shareholder Proposal Receives More Than 25 Percent of Vote

WASHINGTON, May 27 /PRNewswire-USNewswire/ -- Today, the Teamsters' proposal calling on Chevron (NYSE: CVX) to disclose the criteria it uses to start and end investments in high-risk countries received support from more than 25 percent of the shares cast at the company's annual meeting. The strong show of support at Chevron's shareholder meeting indicates growing investor concern around Chevron's controversial stake in Burma.

Through its equity in the Yadana gas-field and pipeline, Chevron plays a pivotal role in providing financial support to the Burmese military regime, notorious for its brutal repression of democracy and systematic violations of human rights. The Yadana project is reportedly the single largest source of income for the regime.

"We're pleased that other Chevron shareholders recognize the enormous legal, financial, political and reputational risks associated with operating in Burma and are demanding increased disclosure on how these decisions are made," said C. Thomas Keegel, General Secretary-Treasurer of the International Brotherhood of Teamsters.

"And in the case of Burma, this is not merely a matter of location," Keegel said. "The Burmese military junta is one of Chevron's partners in Yadana through its military-run oil company, Myanma Oil and Gas Enterprise. That makes Chevron business partners with a pariah military regime that has brutally dominated the people of Burma and that has put a Nobel Peace Prize recipient, Aung San Suu Kyi, under house arrest. What political risk assessments allowed this to happen?"

The Teamsters' proposal requests that Chevron disclose the standards it uses to assess high-risk countries like Burma for potential or continued investment. Chevron's current country selection criteria are opaque, and investors lack the information they need to evaluate Chevron's in-country risk oversight procedures and make informed choices regarding Chevron's governance.

Co-filers of the proposal include the AFL-CIO, Ms. Adelaide Gomer, The Maryknoll Fathers and Brothers, Mercy Investment Program, Newground Social Investment, the Unitarian Universalist Association, and the Ursuline Sisters of Tildonk.

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.

SOURCE International Brotherhood of Teamsters

READ MORE---> Chevron Shareholders Support Teamsters Country Selection Criteria Proposal...

Nigeria: Chevron Shareholders and Executives Greeted by Protesters from Across the Globe

All Africa.com

San Ramon — San Ramon, CA, Chevron’s annual shareholder meeting today became a referendum on the company’s global operating practices, with hundreds rallying outside the meeting against the oil giant’s environmental and human rights record, and representatives of Chevron affected communities inside the meeting speaking directly to the company’s senior executives, board of directors and key shareholders. Present were representatives or allies from communities in Nigeria, Burma, Ecuador, Kazakhstan, Iraq, Canada, the Philippines and Richmond, California.

Inside the meeting Tunde Okorodudu, a pro-democracy activist and former Senatorial candidate for Delta South, in the Niger Delta of Nigeria pronounced powerfully, “what is bad for my people is also bad for business. Communities where Chevron extracts oil have made it known to the company for many years that they were suffering as a result of Chevron’s operations. When villagers ask for jobs, environmental remediation for pollution the company caused, electricity, investment in education and healthcare and environmental audits and mitigations, Chevron responded with minimal investments in community projects that have not dented the community needs.”

“Chevron has known for years that an insurgency was building among frustrated residents of the Niger Delta as a result of the lack of development and environmental harms caused by oil development,” said Okorodudu. “And now, the company’s practices in the Niger Delta have contributed to harm their bottom line, with the attack yesterday of a major oil pipeline in Abiteyeye, which the Wall Street Journal reports reduced Chevron’s output by 100,000 barrels per day.” The company’s 10k report filed with the Securities and Exchange Commission in February 2009 states that its Nigeria oil production for 2008 was 154,000 barrels per day. This means that the current instability has reduced the company’s production by almost two thirds.

Laura Livoti, founder of Justice in Nigeria Now said “Chevron has a responsibility to its shareholders. In order to ensure security and stability for its operations the company must step up and promote development and adequate living standards in the communities from which they are making their profits.”

In addition, Okorodudu addressed the current humanitarian crisis in the Delta stemming from the Nigerian military’s attacks in Delta and Rivers State which have uprooted and displaced villagers, with reports of civilian deaths and starvation as a result. Okorodudu declared “the company must end its relationship with the notoriously brutal Nigerian military. As a 40% partner with the Nigerian government it must bear some responsibility for the destructive actions by the military and its brutal and notorious Joint Task Force (JTF)”.

Outside the meeting protestors carried colorful placards parodying Chevron’s Human Energy advertisements with beautiful photos of a Nigerian villager that read “I will give my baby contaminated water: Chevron refuses to clean up its mess in Nigeria” and another with a photo of a Nigerian boy reading ”I will continue fishing even though the fish are gone: Chevron pollutes fresh water in Nigeria.”

The coalition of groups and Chevron affected communities yesterday released an alternative annual report and a series of parody ads that address the company’s worldwide issues.

READ MORE---> Nigeria: Chevron Shareholders and Executives Greeted by Protesters from Across the Globe...

Bangladesh to Bring Maritime Dispute with Burma and India to UN

By Takaloo, Dhaka (Narinjara): Bangladesh is planning to seek a UN settlement for its maritime demarcations with Burma and India in the Bay of Bengal as the two neighbors have challenged Bangladesh's attempts at hydrocarbon exploration with overlapping charges.

"We are taking preparations to put forward our objection at the UN by June to Myanmar's claim and by November to India's claim in the Bay of Bengal," an official involved in the process told the News Age newspaper on Monday.

The report came after Burma and India both recently opposed Bangladesh's offshore block bidding for exploration of oil and gas in the Bay of Bengal.

Bangladesh has also objected to Burma's test drilling in the sea adjacent to its territory, raising tensions between the two neighbors over the maritime demarcations in November 2008.

According to the United Nations Convention on the Law of the Sea, Bangladesh must demarcate its sea boundaries by July 27, 2011, India must demarcate by June 29, 2009, and Burma by May 21, 2009.

Officials said that Burma submitted its claim for the maritime delimitation to the Commission on the Limits of the Continental Shelf, a UN body established to deal with the law of the sea, in December 2008, while India was set to submit its own claim last Monday.

Bangladesh Foreign Minister Dipu Moni will also leave for Burma for a three-day meeting scheduled for 15 - 17 May with discussion on the maritime boundary issue at the top of the agenda.

READ MORE---> Bangladesh to Bring Maritime Dispute with Burma and India to UN...

China eyes foreign shopping spree

China will encourage its energy companies to make more forays abroad to ensure the country's energy security, an even more important strategy than exploration at home, a senior energy official said today.

"Appropriately obtaining global resources is our inevitable choice and legal right...Winning foreign resources is even more important than stepping up domestic production," Reuters quoted Liu Qi, deputy head of National Energy Administration as telling an industry forum.

He said that his office is helping big Chinese oil companies talk with Papua New Guinea about oil and gas co-operation and has made good progress.

Liu also said China will offer more tax and other policy incentives to oil and gas companies to explore abroad.

He did not elaborate, but state media have said low-interest loans and capital injections could go to oil giants China National Petroleum Corporation (CNPC), Sinopec and China National Offshore Oil Corporation (CNOOC), that aim to expand overseas as the global recession lowers the share prices of possible targets.

Last month, CNPC launched a friendly C$443 million (US$360.6 million) offer for Canada's Verenex Energy, which owns a stake in a promising Libyan oil concession, though the offer was blocked by Libya.

China is working with Burma to build an over 2000 kilometre-long gas and oil pipeline running through Ruili and Kunming in Yunnan province, Guizhou province to Chongqing municipality in southwestern China, Liu said, without providing more details.

The line would help China cut out oil cargoes' long detour through the congested Malacca Strait as well as strengthen China's access to rich energy reserves in Burma itself.

Liu also said that China will not loosen its grip on energy efficiency and environmental protection despite the financial crisis and slowing economy.

S: Upstream Online

READ MORE---> China eyes foreign shopping spree...

Gas Discovery Reported Near Rangoon

By MIN LWIN
The Irrawaddy News

The Myanmar Oil and Gas Enterprise (MOGE) has located an inland gas deposit in Dagon Myothit Eastern Township near Rangoon, according to residents in the exploration area.

MOGE started drilling a test well on February 12 on land owned by a local farmer, Than Tun, near Laydaungkan Village, said a local farmer.

“The exploration group came into the bean fields to conduct seismic surveys in search of gas,” he said. He said drilling tests proved successful on February 14.

Another farmer from Laydaungkan Village said, “They destroyed the crops planted by Than Tun without compensation.” Than Tun was hospitalized because of stress associated with the drilling, he said.

MOGE, which operates under the Ministry of Energy, would not respond to queries from The Irrawaddy about the reported gas discovery. MOGE is the government’s exploration and production department for oil and gas in Burma.

At least 21 multinational oil and gas companies from China, Singapore, South Korea, India, Russia, Malaysia, Thailand, the United States, France, Japan and Australia have long-term contracts with MOGE. The Burmese military government began to allow foreign investments in energy production in 1988.

The military government has signed gas and oil contracts with multinationals such as Total of France; CNOOC and SNPC of China; Daewoo of South Korea; onGC of India; Danford Equities of Australia and PTTEP of Thailand.

According to the Rangoon-based Myanmar Times weekly journal, the Burmese energy sector, including hydropower, oil and gas, comprises 65 percent of Foreign Direct Investment, which is made up of 12 economic sectors that include power, energy, mining, manufacturing, hotels and tourism, livestock and fisheries, transportation and telecommunications.

READ MORE---> Gas Discovery Reported Near Rangoon...

China to start constructing new pipelines through Burma

by Mizzima News
19 November 2008

New Delhi - China is set to commence construction in the first half of 2009 on a giant pipeline project that will connect Sittwe, on the Bay of Bengal in Burma, with China's Yunnan Province.

According to the China Daily newspaper, the China Natural Petroleum Corporation, with a 50.9 percent stake in the project, will head the US $2.5 billion pipeline project. The remaining stake will be held by the Myanmar Oil and Gas Enterprise (MOGE).

The project will include the construction of two separate pipelines, a US $1.5 billion oil pipeline and a US $1.4 billion gas pipeline.

Once completed, the pipelines are expected to provide an alternative route for China's crude imports from West Asia and Africa, Mi Gongsheng, Director of the Yunnan Provincial Development and Reform Commission was quoted as saying.

Currently, 80 percent of China's annual crude imports of 200 million tons must pass through the Strait of Malacca, located more than 1,800 kilometers farther to the east than Sittwe.

READ MORE---> China to start constructing new pipelines through Burma...

Burma-Bangladesh Maritime Talks Fail

By WAI MOE
The Irrawaddy News
November 18, 2008

Burma and Bangladesh failed to resolve the simmering tension between the two countries over a disputed maritime boundary in the Bay of Bengal, according to Bangladeshi newspapers. Talks will resume in Burma in January.

The New Age newspaper said that the two countries ended the two-day maritime boundary delimitation talks inconclusively as both sides refused to change their positions on the method of marking the coastline of the exclusive economic zones in the Bay of Bengal.

“Myanmar[Burma] proposed a corridor in the Bay, and we have rejected it since we feel that equity should be the guiding method to settle the issue under the UN [United Nations] Convention on the 1982 Law of the Sea,” MAK Mahmood, Bangladesh’s additional foreign secretary, told reporters after the meeting on Monday.

He said the Burmese junta rejected the area claimed by Bangladesh. “So, Bangladesh’s plea is not acceptable to them,” he said.

Burma’s deputy foreign minister Maung Myint led the delegation to Bangladesh.

Dhaka’s The Daily Star reported that the next round meeting between the two countries will be held in Burma in January only four months ahead of the Burmese military regime’s deadline for maritime demarcation claims to the UN.

Burma will have to claim the maritime demarcation with Bangladesh by May 21 and the Bangladesh deadline is July 27, 2011 under the UN Convention on the Law of the Sea (UNCLOS-1982).

Burma and Bangladesh talks over the disputed area started in 1974, but the talks were put on hold for more than two decades and only resumed in January. The Dhaka meeting was the fourth round of talks following recent tension in the Bay of Bengal involving maritime vessels from both countries.

In October, the Burmese authorities sent navy ships into the area and permitted a South Korean company to explore for nature gas in the disputed area, prompting Bangladesh to position naval ships in the area.

Vice Snr-Gen Maung Aye, the No. 2 high ranking general at the Burmese junta, visited Bangladesh in early October to attempt to resolve the tension, but the talks failed.

Burmese ruling generals reportedly discussed the dispute at a junta meeting in Naypyidaw which ended last week.

Khine Myat Kyaw, a Burmese journalist who is based in Dhaka, said the two countries are still deploying army troops near the border.

Meanwhile, Burma and China agreed to construct a US $2.5 billion oil-and-gas pipeline project China, according to Japan’s The Nikkei newspaper.

Burma’s state-own Myanmar Oil and Gas Enterprise will own a 49.1 percent stake while the China National Petrol Corp will have 50.9 percent. A US $1.5 billion oil pipeline, and US $1.04 billion gas line will be built, as well as oil and gas storage tanks near Burma’s Kyaukpyu Port, The Nikkei said.

The Burmese regime earned an estimated US $2.5 billion by selling nature gas to Thailand last year.

READ MORE---> Burma-Bangladesh Maritime Talks Fail...