Burma Business Roundup (Saturday, March 31)

By William Boot 31 March 2012

Big Oil Firms Gather in Rangoon

Major Western oil firms were among more than 200 energy industry representatives from 20 countries who took part in an oil and gas “summit” in Rangoon this week.

They included Total, Chevron, PTT of Thailand, China National Offshore Oil Corporation, Mitsubishi, Nippon Oil and Gas Exploration, and Salamander Energy of London.

One of the keynote speakers at the three-day Myanmar Oil, Gas and Power Summit was James Rockall, managing director of the Paris-based World Liquefied Petroleum Gas Association.

The conference was organized by the Singapore-based Centre for Management Technology with Burma’s Ministry of Energy. Its theme was “Gearing Up for the Emerging Oil & Gas Opportunities.”

The state Myanmar Oil and Gas Enterprise (MOGE) announced that it would soon issue oil and gas exploration licences to foreign firms for an additional nine onshore blocks, and planned more.

At least 20 offshore exploration blocks also await bids for licences.

In addition, MOGE is preparing to invite bids for construction and installation of new onshore gas pipelines, mainly to replace old infrastructure, said the industry magazine Upstream.

Oilwatch Southeast Asia, a regional grouping of energy industry NGOs, meanwhile urged foreign companies to wait and see before investing in Burma to avoid triggering what it termed a resource curse.

“Increasing investments in Burma’s oil and gas sector at this time will exacerbate Burma’s resource curse, causing more harm than good to the country,” said an Oilwatch statement coinciding with the Rangoon conference.

“Despite Burma’s resource wealth, gas revenues over the last decade have disappeared under corrupt military leadership. Investment in Burma’s oil and gas sector is not [currently] benefiting people of Burma nor the country’s sustainable economic development,” Oilwatch said.

Salween Hydrodam Back on Development Menu?

Chinese surveyors are reported to be working again at the site of what would be the big hydroelectric dam and reservoir in Burma, on the River Salween near the border with Thailand.

Ground survey work for the 7,300 megawatts capacity dam, which would mostly supply Thailand with electricity, was halted several years ago because of fighting between Burmese and ethnic Shan militias.

Chinese workers were seen surveying land around Tasang, a Shan State Army-South (SSA-South) officer told the Bangkok Post.

“Major Lao Hseng said Myanmar troops had been building up their presence near a planned dam site at Ta Sang, on the western side of the Salween River in Pan and Chiang Tong towns, where dam locations are being surveyed,” the Thailand-based newspaper reported.

SSA-South forces signed a truce earlier this year with the Burmese military.

Sinohydro Corporation, the same Chinese company which is involved in the suspended Myitsone hydropower dam on the Irrawaddy River in Kachin State, is the main contractor for the Tasang project.

“If built it will be the highest dam in Southeast Asia, taller than China’s massive Three Gorges Dam,” says the NGO Burma Rivers Network which opposes the damming of the Salween.

Under existing deals, much of the electricity generated from a hydropower scheme at Tasang would be bought by the Electricity Generating Authority of Thailand.

Singapore Firm Eyes 100-Room Hotel for Rangoon

The construction company Hor Kew Corporation of Singapore is considering building a 100-room hotel in Rangoon as well as small housing estates.

Prospects for the hotel were looked into during a visit to Burma by Hor Kew as part of a Singapore business delegation in February.

Hor Kew’s business development director James Aw told the Asia Times that the economic climate in Burma has greatly changed since his last visit in the 1990s.

“People have spending power now,” he said. “We couldn’t build mass housing of 30,000-40,000 units at one go yet, as we are doing in Singapore. But at least we could do 15-20 unit project types now.”

He gave no further details on the prospective hotel project.

A surge in foreign tourist visits in the wake of recent political and economic reforms has led to an acute shortage of accommodation in Rangoon and other popular visitor destinations.

The government is “stepping up auctions of land plots in prime locations in Rangoon for hotel development,” according to the Bangkok Post.

Pressure for more visitor accommodation will grow with Burma hosting the Southeast Asian Games in December next year and the 2014 summit of the Association of Southeast Asian Nations (Asean).

Australia Promises Step-by-Step End to Sanctions

Australia intends to lift economic sanctions against Burma “stage-by-stage,” the country’s foreign minister said this week.

“We are committed to peeling back the sanctions after consultation with the opposition forces in Myanmar,” Bob Carr said in Phnom Penh after talks with Cambodian leaders.

Cambodia currently chairs Asean and will host this year’s East Asia Summit.

“We want to withdraw sanctions stage-by-stage as the government of Myanmar introduces democracy stage-by-stage,” Carr said in a statement. He did not give a timetable, however.

In January, Australia lifted travel bans against some Burmese leaders.

Australia’s extensive natural resources exploration industry has been deterred from operating in Burma because of the sanctions, which fell into line with US and European Union economic curbs.

Burma Last Country Logging Natural Teak: UN

Burma is one of only four countries left in the world still with natural teak forests, and the only one where a logging ban does not exist.

Burma is home to almost 50 percent of the surviving 29 million hectares shared with Thailand, India and Laos, said a new report by the United Nation’s Food and Agricultural Organization (FAO).

Prohibition of logging and export is credited with an increase in the area of teak woodland in Thailand since 1989, whereas Burma is estimated to have lost 1.1 million hectares of teak forest in that time, said the report.

“Burma is the only country that currently produces quality teak from natural forests,” said the FAO which called for an urgent global program to preserve teak species.