The geopolitics of Gas: The battle of Arakan
Arakan is no stranger to foreign exploitation of its natural resources. Under British colonial rule, foreign investors in the late 19 th century bought the rights to explore and produce oil in Arakan. Although less than in the prosperous Yenangyaung fields in central Burma, the Ramree and Baronga Islands literally had, and still has, oil seeping out of its ground.
After a 100 year lull, investors have in the last year once again started queuing for Arakan resources, this time targeting gas reserves. In a world of high oil prices, India and China is among the leading countries in Asia and the world with strategies to increase the usage of natural gas. Both are now on a world wide shopping spree that even includes several competing exploration interests in Africa.
Although South Korean Daewoo initiated exploration in Arakan by buying 100% of the exploration rights in the A-1 field in 2000. Indian government companies have since late 2001 purchased stakes in Production Sharing Contracts (PSC) Blocks A-1 and A-3.
China has only in the last year acted on the strategic importance of Arakan, but have made up for lost ground by signing a series of onshore and offshore PSCs since September 2004. Since then, Chinese companies have bought exploration rights to seven blocks covering an area of over 37,000 square miles (24 million acres), larger than the combined area of Arakan, Chin, Karenni and Mon states. (a)
A consortium of two Chinese and one Singaporean companies in October secured rights to oil and gas exploration in Block M in Kyaukphyu Township. The consortium includes The China National Offshore Oil Company (CNOOC) Myanmar Ltd of China, China Huanqiu Contracting and Engineering Corporation and Golden Aaron Pte. Ltd of Singapore. (b) Considered even higher potential, the same consortium in December 2004 bought the exploration rights for the A-4 block off the Arakan coast as well as the M-10 Block off Burma’s south eastern coast.(c)
Then in late January, the same CNOOC-led consortium also purchased PSCs for the Offshore M-2 block south of Arakan as well as onshore blocks C-1 and C-2 in Sagaing Division. (d)
The CNOOC raised more than a few eyebrows when it in recently showed interest in acquiring the US corporation UNOCAL, famed for being dragged down by a lawsuit against its Yadana operations in Burma , on grounds of complicity with the regime’s human rights abuses. (e)
China’s Sinopec (Dian-Qian-Gui Petroleum Exploration Bureau) started the Chinese purchase spree in September 2004 when it purchased oil and gas exploration rights to Block D in Sagaing and Magway Divisions. (f)
In trying to cut time of transport of oil from the Middle East to China, China has also listed the potential of an oil pipeline from Arakan’s capital Sittwe to its western Yunnan Province. (g)
While the military regime has proven to show minimal concern with
international pressure for its blatant human rights abuses and
incarceration of the opposition leader Aung San Suu Kyi, the SPDC is
nursing, and benefiting from, its relations with China and India. A
more unstable mediator between Asia’s super powers, than the SPDC,
would be hard to find.
Stakeholders: Parties with
direct or indirect interest in the processes and outcomes of
this development project.
- The Issues:
four main issues driving the SHWE Gas Movement's
- The Latest
News: Stay abreast of the most recent SHWE Gas
- Take Action:
Learn what you can help stop the ongoing Shwe
Project and help the people of Burma.