The Race for Burma's Natural Gas

The February issue of HIMAL SOUTHASIAN reports on the competition for Burma's huge deposits of natural gas and what it means for human rights in one of the most oppressive regimes in Asia.

Even as Southasia’s energy-strapped, fast-growing economies have led many to wonder whether antagonistic neighbours may be pushed together into forced cooperation, on the eastern edge of the region a less optimistic dynamic is playing out. Indeed, the huge natural-gas reserves of Burma have caused many Asian governments to turn a blind eye to Rangoon’s continued oppressive and non-democratic tactics.

Burma stands on the world’s tenth largest natural-gas reserves, estimated at more than 90 trillion cubic feet (tcf) in 19 on-shore and three major offshore fields. As the economies of South, Southeast and East Asia have soared upwards in recent years, the Shwe ‘gas block’ in western Burma’s Arakan state has instigated intense competition between India, China, South Korea, Thailand, Japan and Singapore. South Korea’s Daewoo International estimates that just two blocks from the Shwe gas field together have a reserve of about 20 tcf, equivalent to about 3.5 billion barrels of oil. There are currently four stakeholders in the Shwe Gas Project – Daewoo (which controls 60 percent), KOGAS of South Korea, and two Indian interests, the Oil and Natural Gas Corp (ONGC) and the Gas Authority of India Limited (GAIL)....

Burma remains one of the most repressive countries in Asia, despite promises for political reform and national reconciliation by its government, which continues to spend 40 percent of the country’s national budget on defence, and just five to ten percent on health and education. Burma’s military, the Tatmadaw, is Southeast Asia’s second largest conventional force, estimated at over 400,000 troops. The junta stands to profit by up to USD 17 billion dollars from the Shwe Gas Project over its lifespan, which could become the government’s single largest source of revenue – up to USD 825 million per year....

Meanwhile, in early January 2007, just days after China and Russia jointly blocked a proposal before the United Nations Security Council to censure Rangoon’s continued human-rights abuses, the Chinese government landed a new deal to further explore Burma’s petroleum resources. Negotiations between India and Burma over gas pricing are continuing, with an agreement expected by the middle of the year. Such is the desperation for Burmese natural gas in India, and such a fear of growing Chinese influence on Burma, that human-rights issues will cut much ice in New Delhi – particularly if the Indian civil society continues to keep mum.

via The Marmot