Oil explorers ready to withdraw

Many oil companies in Myanmar are pulling out of expensive but fruitless exploriation projects, dashing the military regime's hopes of future oil revenues.

 
Last Updated: Saturday 04 July 2015

THE MYANMAR military junta's plans to use income from oil and gas concessions to buy weapons to keep its brutal dictatorship going have run into a snag, as many of the disenchanted international oil companies have decided to pull out. After three years in fruitless exploratory drilling, most of the companies are surrendering the leases that have already cost them an estimated $415 million in expenses. Commenting on the frustrating search, a diplomat in Rangoon said, "They have spent an awful lot of money not finding oil." The country's ruling State Law and Order Restoration Council (SLORC) now hopes to replenish its dwindling coffers by awarding a contract to the French oil company, Total, to exploit known offshore gas reserves in the Gulf of Martaban. The $1 billion project, which involves exporting most of the gas by pipeline to neighbouring Thailand, is expected to be implemented towards the end of the decade. SLORC rules the nation of 42 million with an iron fist, not hesitating to gun down an estimated 4,000 students and others who protested the military coup in 1988. In subsequent elections forced on the junta by international economic and social pressure, SLORC got only 2 per cent of the vote but wasted no time in imprisoning Nobel Peace prize-winning Aung San Suu Kyi and the other leaders of the National League for Democracy, which won a resounding 81 per cent vote. Companies who signed three-year, exploratory leases beginning late 1989 include Amoco and Texaco (USA), Premier Oil, Croft Exploration and Kirkland Resources (UK), Royal Dutch Shell (UK and the Netherlands), Idemitsu and Nippon Oil (Japan), Yukong Oil (South Korea), Petronas (Malaysia), Elf (France), Broken Hill Petroleum (Australia) and Petro-Canada. In negotiating the leases, Amoco's contract to explore for oil in a 33,000-sq km tract in northern Myanmar cost the firm $5 million as signing bonus. The money was paid to SLORC, whose chief, General Saw Maung, and Amoco chairperson H Laurence Fuller met privately in Rangoon. But Amoco spokesman Jim Fair now says his firm "is currently evaluating whether it will continue in Burma, period". Petro-Canada, which is 80 per cent state-owned, signed a $22 million oil exploration contract, including an initial $6 million signing payment. Some oil company spokesmen said they are giving up exploration leases because of adverse publicity generated by human rights groups such as a statement alleging "tens of thousands of Burmese people are being forced to labour on roads for less than subsistence wages for the benefit of the oil multinationals and the junta". A Canadian environmental group, Friends of the Rainforest, which has organised a boycott of Petro-Canada, says upto "90 per cent of any oil and gas production goes to the military regime" and the firm's oil investment dollars are helping "to turn mainland Asia's last significant forest region into a wasteland". SLORC's rape of Myanmar has spanned the entire range of the country's rich natural resources, from timber and fishing rights to minerals and precious stones. Some SLORC officers are even reported to be deeply involved in opium cultivation for the manufacture of heroin for sale in the international market. Reports from Chiang Mai, a Thai town on the edge of the notorious drug-producing region nicknamed Golden Triangle, indicate opium cultivation in Myanmar increased by 40,000 ha in the first year of SLORC's ruling and has been growing steadily since.

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