12 January 2005

India to acquire stake in Myanmar's energy sector

12 January 2005
The Hindu

International - India & World

India to acquire stake in Myanmar's energy sector

By Siddharth Varadarajan

YANGON, JAN. 11. Taking a strategic view of the fast developing energy sector in Myanmar, India has decided to play an active role in the exploitation of off-shore and deep-sea gas and petroleum blocks being offered by the Government here. Though Indian energy companies such as GAIL and ONGC Videsh Ltd. are reportedly unsure about the quality of the data underpinning several blocks, the Manmohan Singh Government appears to be taking the view that it is in India's strategic interest to acquire a stake in what is being offered.

On Tuesday, the Prime Minister of Myanmar, Lt. Gen. Soe Win, met the visiting Indian Minister for Petroleum and Natural Gas, Mani Shankar Aiyar, and urged India to get involved in the development of his country's energy resources.

Crucial issue

Senior ONGC and GAIL officials, who are here as part of Mr. Aiyar's delegation, are set to begin talks with the Myanmar Energy Ministry on Wednesday itself, the day Mr. Aiyar will discuss with his Bangladeshi and Myanmar counterparts the crucial issue of a pipeline running from off-shore blocks in the Bay of Bengal to the mainland and then Tripura and West Bengal via Bangladesh.

While the idea of India sourcing Myanmar gas via a pipeline through Bangladesh has been talked about at various levels, Wednesday's meeting between Mr. Aiyar, Brig. Gen. Lun Thi and the Bangladeshi Minister of State for Energy, A.K.M. Mosharraf Hossain, will be the first time the issue is taken up concretely. It is also the first time the Bangladesh side will formally enunciate its position on the proposal.

India has already a 30 per cent stake in two Myanmar off-shore gas blocks, A-1 and A-3. The A-1 block, where GAIL had drilled an appraisal well, is estimated to contain reserves of 14 to 42 trillion cubic feet (tcf). Though the more lucrative A-5 is no longer available, on offer now are A-2, A-7 and a number of blocks in the M series. ``We lost other blocks because of our nervousness," a senior Indian official told The Hindu . "Myanmar is our neighbour and if we are not quick off the mark, China can always come in to fill the void. That is why we are coming round to the view that there is great strategic value in playing a pro-active role."

Pact signed

On Tuesday, Mr. Aiyar met Brig. Gen. Lun Thi and signed a memorandum of understanding for cooperation in the petroleum sector. India has also decided to extend a $20 million line of credit to help Myanmar upgrade its Thanlyn refinery. Forty per cent of that amount will be used to finance import of equipment and machinery from India.

Indian officials say New Delhi is also keen to help the Myanmar side in the expansion of downstream capabilities and that Mr. Aiyar told Brig. Gen. Lun Thi that the special economic zone in the province of Rakhine could provide the framework for India to get involved in industrial projects.

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