The Irrawaddy Business Roundup (March 22, 2014)

By William Boot 22 March 2014

‘Complications’ in Shwe Field Slow Burma’s Gas Flow to China

The pipeline running through Burma and carrying gas from the Bay of Bengal to China is working at less than 20 percent capacity because of “complications” in the Shwe offshore gas field, an industry report said.

“The China-Burma gas pipeline is running significantly under capacity because of complications in the offshore drilling program,” Interfax Gas Asia news agency said this week.

“More than seven months after its commissioning ceremony, the pipeline is handling a fraction of its designed capacity of 12 billion cubic meters per year, according to Chinese customs data,” Interfax reported. The throughput figures indicate it is less than 20 percent of full capacity use.

“Industry sources attributed the delays to a hold-up offshore. One source told Interfax that Daewoo International, which operates the offshore Shwe gas fields feeding the pipeline, was behind schedule in its drilling program. Daewoo could not be reached for comment,” the report said.

Daewoo of South Korea leads an international consortium operating the Shwe field which includes two Indian state firms, ONGC Videsh and GAIL.

State-owned China National Petroleum Corporation bought the rights to 90 percent of the gas in the Shwe field and has a contract with the Burma government’s Myanmar Oil & Gas Enterprise to offload 400 million cubic feet per day.

Rangoon to Host Oil and Gas ‘Congress’ Organized by Chinese Firm

With no sign of an announcement on the winners of international bids for 30 new offshore exploration contracts, the Burmese government is holding yet another oil and gas industry conference in Rangoon to promote investment.

Three have already been held so far this year in Rangoon.

The Myanmar Offshore Congress, to be held over two days in September, will “provide an exclusive opportunity for international oil and gas professionals to meet local government, operators, and other local players, discussing and learning about one of the world’s most exciting offshore regions,” said the organizers SZ&W Group, based in Shanghai.

SZ&W Group claims on its website to have the backing of the Naypyidaw government and hopes to attract up to 200 industry representatives.

A series of such conferences and forums have been held over the past two years.

Local and Southeast Asian oil firms have secured contracts since President Thein Sein took office, but a major Western company has yet to secure a contract.

Japanese Firms Queue for Thilawa But Worry About Labor, Power

As many as 100 Japanese firms have expressed interest in investing in Thilawa Special Economic Zone after infrastructure work is completed, Japanese government trade promotion agency JETRO said.

The first phase of the SEZ on the outskirts of Rangoon is scheduled to be completed by 2015, said one of the three main Japanese site developers, Mitsubishi Corporation. The other two are Sumitomo Corporation and Marubeni Corporation.

However, JETRO’s chief representative in Burma, Masaki Takahara, told an SEZ promotional forum in Rangoon this week that investors were concerned about two major issues: adequate electricity supply and sufficient skilled labor.

Takahara said about 1,000 employees will be needed when the first phase is ready, according to a Mizzima report.

Thilawa will offer facilities for warehousing, factories and port transshipment of goods.

The start of site clearance and installation of water and electricity utilities was held up last year due to land access rights.

ILO Accuses Thailand of Failing to Deal With Abuse of Burmese Migrants

The government of Thailand has been criticized by the International Labor Organization (ILO) in Geneva for failing to tackle abuse of rights problems associated with huge numbers of illegal migrant workers, mostly from Burma.

The criticisms are made in a lengthy report to be presented to an ILO conference in Geneva in June, an advanced copy of which has been seen by The Irrawaddy. The report by a committee of experts highlights Thailand’s “inadequate responses” on forced labor and child labor.

The report states: “The committee once again urges the [Thai] government to take the necessary measures to ensure that migrant workers, particularly those in the fishing industry, are fully protected from abusive practices and conditions that amount to the exaction of forced labor. It also requests the government to further strengthen its law enforcement mechanisms, including measures to enforce anti-trafficking laws against those who target migrant fishermen, as well as to ensure that sufficiently effective penalties are applied to persons who subject these workers to conditions of forced labor.”

Thousands of Burmese work in the fishing and fish canning industries in Thailand and there have been numerous reports over the past year of abuse.

“Thailand features prominently regarding labor abuses in this ILO annual document. Particularly, Thailand is censured in the report in relation to forced labor against migrant workers, poor and ineffective migration policy management,” said a Burma human rights activist in Bangkok, speaking on condition of anonymity for security reasons.

Burma’s Jade Export Earnings Shine as Japanese Lead List of Buyers

The value of Burma’s jade exports in 2013 rocketed by more than 30 percent to a record US$920 million, according to government figures.

The earnings from exports in the nine-month April-December period compared with $600 million a year earlier, said the Ministry of National Planning and Economic Development, quoted by Eleven Media.

The chief buyers come from China, Hong Kong, India and Japan. Japanese were the biggest buyers, according to the ministry.

Exhibitions of Burmese jade tend to draw much attention from those countries, but Japan is the top buyer. Burma’s annual jade production is more than 10,000 tons. The highest production month is May.