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Myanmar and its coveted natural resources

Updated On: Apr 10, 2007

When Myanmar first emerged into the international spotlight as a “rogue” state highlighted by the West and its media for what they label as an oppressive political regime, it probably did not expect to have the capability to counter West-imposed sanctions by offering its natural resources to non-Western emerging powers.

By playing off India and ChinaMyanmar was able to circumvent Western admonishments by offering its energy resources to the two great energy-starved Asian giants. Straddling between South and East AsiaMyanmar at one point was also able to play off SAARC against ASEAN. Given its rich resources, the Myanmarjunta stands oblivious to all criticisms as neighbours clamoured for access to these resources.   

Myanmar is emerging as an energy power in its own right. PTT Exploration and Production (PTTEP), a Thai-listed company, have found a "high amount of natural gas" in its offshore Zawtika-2 field in M9 Block in Burma's Gulf of Martaban and the company's fourth well in the Zawtika-2 area had discovered natural gas with a flow rate of 109.5 million standard cubic feet per day (mmscfd) on average. Boosted by the results, the company is preparing to drill four or five more appraisal wells.

Burma currently supplies Thailand with 869mmscfd of natural gas, delivered by offshore and onshore pipelines from reserves in the Gulf of Martaban to Ratchaburi province to generate electricity. Thailand’s total use of natural gas is 3,222mmscfd, accounting for 37 per cent of its energy needs, 27 per cent of which comes from neighbouring Burma. This dependence is likely to grow larger as Thailand’s offshore natural gas reserves in the Gulf of Thailand are expected to start to decline within two years.

But gas isn’t the only thing that Thailand needs from Myanmar. Both states have begun building a hydropower dam on the Salween River, the longest undammed waterway in Southeast Asia.  Thailand's MDX Group has invested about US$6 billion (Bt210 billion) in the Tasang project in eastern Shan state, which is the largest amongst the four scheduled dams on the Salween. "On completion, generators to be equipped at the power station will have a total capacity of 7,110 megawatts and the project is expected to produce 35,446 million (kilowatts per hour) yearly," Myanmar’s state media said.

Even for such dam projects, Myanmar has a back-up system. If, for example, Thailand is under any domestic or ASEAN pressures to go slow on such projects, three more dams on the Salween near the Thai-Burmese border are in the pipeline, mostly backed by Chinese state-owned energy companies – much bigger boys and far greater resources to spare.

Singapore which is well-known for its pragmatism is now looking into Myanmar as a long term supplier of sand, cement and granite in the light of the recent Indonesian sand ban and delay in granite supplies to Singapore from Indonesia.  In return, Myanmar's State Peace and Development Council Secretary-1, Lieutenant-General (LG) Thein Sein encouraged more Singapore companies to invest in MyanmarMyanmar would obtain foreign currency from sale of resources toSingapore. (9 April 2007)

Sources:

Salween dam construction begins (The Nation, 7 April 2007)

Tension at the border (Bangkok Post, 5 April 2007)

PTTEP upbeat on gas find in Burma (The Nation, 5 April 2007)

As Myanmar's new capital emerges, analysts question its true cost (Agence France Presse, 5 April 2007)

Myanmar could supply sand, granite (Business Times Singapore, 4 April 2007)

Myanmar offers to supply Singapore with sand and granite (Straits Times, 4 April 2007)