Burma Business Roundup (Aug. 17)

By William Boot 17 August 2013

Daewoo to Seek More Gas in Shwe Offshore Field, but Terms Still Secret

South Korean conglomerate Daewoo International is planning to explore for more natural gas in its Bay of Bengal Shwe field, the oil industry magazine Upstream reports.

“Daewoo and its partners are planning to exploit the Shwe, Shwe Phyu and Mya fields, which have estimated proven and probable recoverable reserves independently put at a minimum 4.5 trillion cubic feet of gas,” the magazine said.

The Shwe field is now producing 120 million cubic feet per day of gas, which is being sold to the China National Petroleum Corporation, but Daewoo is “looking to boost this to 500 million cubic feet per day by the end of next year when more production wells will be added,” Upstream said.

Daewoo is the operator of the Shwe field with a 51 percent interest. Its partners include India’s Gail and ONGC, Kogas also of South Korea, and the Myanmar Oil & Gas Enterprise, which has a 15 percent stake.

The financial terms of the Shwe field’s operation and profit have never been made public and it remains unknown how much Burma gains from the agreement.

Gas Firm PTTEP Denies Wrongdoing in Award of Offshore Licences

Thailand’s state-owned oil and gas company PTTEP denied using bribery to secure licences earlier this year for two offshore exploration blocks in Burma’s Gulf of Martaban.

The denial followed a report in the Myanmar Times that former Minister of Energy Than Htay was fired over the licences because of industry complaints that they had not been awarded fairly.

The block licenses, near other development concessions already held by PTTEP, were awarded separately from the open bidding round for 30 offshore block licenses that are still to be decided.

“PTTEP would like to deny the intransparency [sic] and bribery of the MD-7 and MD-8 acquisition and would like to clarify that the process of direct negotiation for both blocks started in early 2010 before the current Offshore Exploration Block Bidding Round,” the Bangkok company’s statement said.

However, the Myanmar Times said its report linking the blocks award with Than Htay’s dismissal did not claim that PTTEP paid bribes.

The MD-7 and MD-8 licenses were issued to the Thai firm after a major bidding round for offshore oil and gas licences was postponed last September amid foreign concerns about a lack of transparency in the process involving the Myanmar Oil & Gas Enterprise.

Indian IT Firm Makes Burma Investment Feasibility Study

Indian information technology services company Tata Consultancy Services Limited has done a feasibility study on investing in Burma, The Hindu Business Line newspaper said.

“We know there are going to be substantial investments in [Burma]. But again, finding the right partner is important. Like in any country that is in the process of stabilizing, there would be lot of unknowns,” Tata chief executive R. Ramanan told the paper.

Tata’s subsidiary CMC Limited is interested in infrastructure development projects, especially in mining, it said.

“CMC recently sent a delegation to [Burma] to explore investment opportunities,” said The Hindu. “India’s investment in Myanmar currently is US$275 million. It is expected to increase tenfold in a couple of years.”

Japan, S. Korea Look at Ways to Give Technical Help to Small Businesses

The Japanese and South Korean governments are planning to provide technical assistance and loans to help small businesses and farmers in Burma.

The Japan International Corporation Agency (JICA) is in talks with the Myanmar Livestock Federation about the terms of providing small loans to farmers via agricultural banks, according to Eleven Media.

JICA is also talking to NGOs about providing technical agricultural help, such as improved animal breeding practices.

Separately, South Korea’s Ministry of Trade, Industry and Energy will reportedly “provide technical assistance to small and medium enterprises involved in energy, construction and manufacturing,” media reports said.

The Korean ministry will also look at ways to assist with technical help in construction, power generation, shipyards and environmental conservation, said Eleven Media.

Room Pricing and Quality Checks Ahead of SEA Games in December

Burma’s Ministry of Hotels and Tourism and the Myanmar Hoteliers Association are inspecting accommodation standards and pricing ahead of the Southeast Asian Games, which the country will host in December.

The games will be staged in Naypidaw, Rangoon, Mandalay and Ngwe Saung in Irrawaddy Division, requiring accommodation for thousands of athletes from the region.

“The Ministry of Hotels and Tourism and Myanmar Hoteliers Association is carrying out an advanced inspection of selected hotels in the country as part of the government’s strategy to ensure they meet an acceptable standard for foreign visitors,” said the tourism industry magazine TTR Weekly.

“Hotels have been accused of overcharging and delivering poor service and this has prompted the government to establish hotel zones to encourage international investment in new properties,” TTR reported.

A big surge in foreign visitors to Burma has left the country struggling to provide sufficient accommodation and other facilities.

The SEA Games will take place from Dec. 11 to 22. Reports say up to 5,000 athletes and supporters from 11 countries could put a severe strain on Burma’s facilities.

The Japan International Corporation Agency (JICA) has offered to provide technical help for the games.