Oil companies fuelling Burma's junta
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BANGKOK–Just over a week ago – 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 oil and gas resources in the country also known as Myanmar 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 per cent of Burma's gas output.
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. Last 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, U.S. 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. At least 10 people were killed in two days of violence last week. Soldiers fired into a crowd of demonstrators in Rangoon on Thursday and occupied Buddhist monasteries and cut public Internet access on 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 per cent of the world's total reserves, at current production rates and Thailand's contract price for gas, the deposits are worth almost $2 billion (U.S.) a year in sales over the next 40 years.
"It points to the potential that (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 website. 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, Thailand's PTT Exploration & Production PLC, South Korea's Daewoo International Corp., Chinese state-run companies China National Offshore Oil Corp. and China Petroleum & Chemical Corp. – are exploring or developing 29 blocks, Total said.
Despite economic sanctions against Burma by the U.S. and the European Union, Total continues to operate the Yadana gas field, and Chevron Corp. has a 28 per cent stake through its takeover of Unocal. Existing investments were exempt from the investment ban.
Total and Chevron broadly defended their business in the nation.
"A forced withdrawal would only lead to our replacement by other operators probably less committed to the ethical principles guiding all our initiatives," said Jean-François Lassalle, Total Exploration's vice-president of public affairs.
Chevron's interest in the Yadana project is "a long-term commitment that helps meet the critical energy needs of millions in people in the region," said Nicole Hodgson, corporate media adviser for Asia.
Total and former partner Unocal Corp. were accused of co-operating with the military in human rights violations while a pipeline was being built across Burma to Thailand in the 1990s. Both denied the accusations, but Unocal settled a related lawsuit in the U.S. in 2005, prior to being acquired by Chevron.
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