Saturday, September 29, 2007
Firms Seek Access to Burma Oil Fields Despite Bloody Crackdown
By Thomas Hogue/AP Writer/Bangkok
September 29, 2007—Just last Sunday—when marches led by Buddhist monks drew thousands in Burma's biggest cities—Indian Oil Minister Murli Deora was in the country's capital for the signing of oil and gas exploration contracts between state-controlled ONGC Videsh Ltd and Burma's military rulers.
The signing ceremony was an example of how important Burma's oil and gas resources have become in an energy-hungry world. Even as Burma's military junta intensifies its crackdown on pro-democracy protests, oil companies are jostling for access to the country's largely untapped natural gas and oil fields that activists say are funding a repressive regime.
China—Burma's staunchest diplomatic protector and largest trading partner—is particularly keen on investing in the country because of its strategic location for pipelines to feed the Chinese economy's growing thirst for oil and gas.
Companies from South Korea, Thailand and elsewhere also are looking to exploit the energy resources of the desperately poor Southeast Asian country.
France's Total SA and Malaysia's Petroliam Nasional Bhd, or Petronas, currently pump gas from fields off Burma's coast through a pipeline to Thailand, which takes 90 percent of Burma's gas output, according to Thailand's PTT Exploration & Production PLC.
But investing in Burma has brought accusations that petroleum corporations offer economic support to the country's repressive junta, and in some cases are complicit in human rights abuses. This week's bloody clampdowns on protests have escalated the activists' calls for energy companies to pull out of the country.
"They are funding the dictatorship," said Marco Simons, US legal director at EarthRights International, an environmental and human rights group with offices in Thailand and Washington. "The oil and gas companies have been one of the major industries keeping the regime in power."
Demonstrations that started a month ago over a spike in fuel prices have become a broader protest against the military rulers. Ten people were killed in two days of violence this week. Soldiers fired automatic weapons into a crowd of demonstrators in Rangoon on Thursday and occupied Buddhist monasteries and cut public Internet access Friday. The moves raised concerns the crackdown on civilians was set to intensify.
Burma's proven gas reserves were 19 trillion cubic feet at the end of 2006, according to BP PLC's World Review of Statistics. While that's only about 0.3 percent of the world's total reserves, at current production rates and Thailand's contract price for gas, the deposits are worth almost $2 billion a year in sales over the next 40 years.
"It points to the potential that Myanmar [Burma] has," said Kang Wu, a fellow at the University of Hawaii's East-West Center in Honolulu.
Altogether, nine foreign oil companies are involved in 16 onshore blocks exploring for oil, enhancing recovery from older fields, or trying to reactivate fields where production has been suspended, according to Total's Web site. A block is an area onshore or offshore in which an oil company is granted exploratory and discovery rights.
Offshore, nine companies, including Total, Petronas, PTTEP, South Korea's Daewoo International Corp, Chinese state-run companies China National Offshore Oil Corp, or CNOOC, and China Petroleum & Chemical Corp, or Sinopec, are exploring or developing 29 blocks, Total said.
Despite economic sanctions against Burma by the United States and the European Union, Total continues to operate the Yadana gas field, and Chevron Corp has a 28 percent stake through its takeover of Unocal. Existing investments were exempt from the investment ban.
Both Total and Chevron broadly defended their business in the nation.