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Daewoo Finds New Gas Mine in Myanmar

Na Jeong-ju
From The Korea Times
March 31, 2005
link to this article.

Daewoo International said Thursday that its overseas energy development team has found a gas reserve in the sea off Myanmar whose size could be as big as the one it discovered earlier, which contains up to four to six trillion cubic feet of gases.

"We are conducting test drillings in the newfound mine to check how much gas it has," Lee Jae-deok, a Daewoo official, told The Korea Times. "It is too early to say whether it is worthy to develop. We may hit another jackpot there, but nobody knows."

Lee said the results of test drilling will come out in 15 days.

Daewoo's stock rose sharply in the morning session to reach 15,500 won per share, but lost some gains as drilling experts remained skeptical about commercial use of the new reserve.

Daewoo has been exploring the bottom of the Myanmar sea to find natural gases. It is now producing gases in Shwe, which is estimated to contain a 140-meter-thick mine spanning a few kilometers.

"The new reserve is located in Shwe Phyu near Shwe," Lee said.

Daewoo officials said the firm is conducting final surveys on the Shwe area before pumping gases out for sale. Analysts forecast that Daewoo may earn at least $100 million in net profit annually for 20 years from 2010 once gas production begins.

Experts have said huge mines may exist in Shwe Phyu and Ngwe. Daewoo is a main investor in the development of gas mines in Shwe, Shwe Phyu and Ngwe in Myanmar.

It is also taking part in projects to develop gas mines in Oman, Vietnam and oil fields in Peru.

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ILO to Crack Whip on Junta

Marwaan Macan-Markar
From Inter Press Service, Thailand
March 25, 2005
link to this article.

A month after it was spurned by Burma's military regime, the U.N. labour agency has come down hard on that South-east Asian nation's junta, declaring that sanctions may have to be imposed due to continued labour rights violations.

The International Labour Organisation (ILO) warned Rangoon that it has till June to clean up its act by stopping the pernicious practice of forced labour or face sanctions from member states of the Geneva-based body.

"It was widely felt that the 'wait-and-see' attitude which has prevailed since 2001 can no longer continue," an ILO press statement declared Friday at the end of a three-week session of the group's governing body.

During the discussions on forced labour in Burma, also known as Myanmar, the governing body concluded that Rangoon had not lived up to its promises to stop such abuse. "The overall assessment falls far short of our expectations," the statement added.

This week's verdict comes as welcome news for Burmese human rights campaigners, given how sensitive the junta is to the decisions of the U.N. labour agency as opposed to other U.N. officials, who have not been as successful to trigger change within the country's dictatorship.

"The military government will not be able to ignore the ILO's call for sanctions," Aung Naing Oo, research associate at The Burma Fund, a Washington D.C.-based rights lobby, told IPS. "U.N. intervention in Burma has been largely ineffective with the exception of the ILO, which has achieved some change through previous threats of sanctions."

The conditions for such economic threats were set in late February, when Burma's military leaders, including the country's strongman, Senior General Than Shwe, avoided meeting with a visiting high-level ILO team in Rangoon.

In response, the delegation, led by Sir Ninian Stephen, former governor general of Australia, cut short its visit due to such a lack of cooperation. But prior to its departure, the delegation issued a plan of action for labour reform.

It called on the junta to order the army to stop the use of forced labour, to mount an effective publicity campaign to convey the same message and to renew Rangoon's pledges to rid the country of this scourge.

It also wanted the military regime to guarantee rights such as freedom of movement to the ILO's staff, following restrictions that have been imposed, and to extend an amnesty for three Burmese who have been convicted of high treason for having contact with the U.N. agency.

That the ILO did not take too kindly to Than Shwe's failed meeting with the visiting delegation was also reflected in this week's message. "Although the government of Myanmar stated that the political will to address forced labour existed, the Governing Body expressed grave doubts about the credibility of these statements due to the attitude adopted by the authorities towards the (visiting delegation)," the ILO stated.

This week's call for sanctions will not be the first such effort by the ILO to crack the whip on the Burmese generals due to forced labour. In 2000, a resolution was adopted by the three main groups that belong to the international body - governments, employers and workers representatives - to impose sanctions.

The harsh measures included economic divestment and bans on international trade unions, U.N. agencies and ILO members from doing business with Burma.

But the State Peace and Development Council (SPDC), as the military regime calls itself, preempted that threat from being implemented by introducing laws to ban forced labour and agreeing to work with the ILO on a reform plan.

Yet the violations have continued, with the chief perpetrator being the powerful Burmese army, which has dominated the country with an iron fist since a military coup in 1962. It is currently the second largest army in Asia with at least 400,000 men and it gobbles up more than half the country's budget.

The ILO estimates that over 800,000 people in Burma are victims of forced labour, which ranges from cleaning roads, carrying heavy loads for the army, constructing military buildings and working on infrastructure projects.

"The Burmese army uses forced labour extensively and now the military is trapped in its own policy," said Aung Naing Oo, the researcher. "The army has needed forced labour to survive."

On the other hand, were sanctions imposed, the military generals would suffer, "since they own many businesses that will be affected," he added.

According to the Brussels-based International Confederation of Free Trade Unions (ICFTU), the 1989 State-owned Economic Enterprise Law of 1989 has given the junta the right to control 12 key areas of economic enterprises. They range from exploiting the teak forests for trade, exploring and extracting petroleum and natural gas, air transport and railway services. Control of the banking and insurance services also fall under the ambit of this law.

"Than Shwe knows what the ILO can do," Aung Naing Oo asserted. "And nobody has the authority to tell the army to stop but him."

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Aiyar proposes Iran-India gas pipeline extension to China via Myanmar

From The Independent, Bangladesh
March 18, 2005
link to this article.

Indian Petroleum Minister Mani Shankar Aiyar has said that the Iran-India gas pipeline through Pakistan had enough safeguards against disruptions in supplies and proposed its extension to China via Myanmar.

"If the Iran-India pipeline is to be extended via upper Myanmar to south China, disruption in supplies to India would mean supplies to China would also be stopped and that could prove enough deterrent for Islamabad," he said at a meeting of the Forum of Financial Writers in New Delhi on March 14.

India could earn huge transit fee through this pipeline, according to a report published in the Hindustan Times.

Mr. Aiyar said the Iran-India pipeline has sufficient safeguards and any disruption could be repaired within two-three days. There will be storage sites set up to ensure that the disruption in supplies does not have any serious impact.

Answering queries regarding India’s dependence on Iran for gas and US concerns, he said: "We have to look after our interests. Our interests lie in securing energy security and that we plan to do by networking with oil and gas rich neighbouring states including Iran. While we are alive to US concerns, we hope they are also alive to our energy security concerns. The US concerns with respect to Iran have been widely made known. The US is also aware of our energy requirement."

Mr. Aiyar said the government would revert to oil PSUs fixing petrol and diesel prices within a price band when the global oil prices stabilise. "We will like to revert to the price band mechanism (fixing auto fuel prices in a narrow 10 percent band) when international prices stabilise," he added.

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Myanmar bars foreign firms from new onshore oil and gas exploration

From AFP
March 14, 2005
link to this article.

YANGON (AFP) - Myanmar's military government has barred foreign firms from onshore oil and gas exploration and production, opting to reserve the operations for state enterprises, the Myanmar Times reports.

The report did not say whether existing contracts with foreign firms would be terminated.

The energy ministry has sent letters to foreign firms that are seeking exploration and production rights for onshore blocks, explaining that the blocks would be reserved for its Myanma Oil and Gas Enterprise, the semi-official weekly newspaper cited ministry official Soe Aung as saying.

The decision became effective March 7, said Soe Aung, who was named as a director in the ministry's energy planning department.

The government has demarcated 46 onshore blocks in Myanmar, of which nine are under development by foreign firms, the report said.

Yangon has signed dozens of oil and gas exploration and production contracts with foreign companies, mostly for offshore gas operations, since the country opened its doors to foreign investment in 1988. They include firms from Canada, China, France, India, Korea, Malaysia, Singapore, Thailand and the United States.

Export of natural gas is Myanmar's largest foreign currency earner. It takes some 400 million dollars per year on its gas sales to neighbour Thailand from its Yadana and Yetagun gas fields in the south.

French oil group Total and US giant Unocal both invest in Myanmar and have been accused by human rights groups of ignoring abuses during the building of a 1.2-billion-dollar gas pipeline in the country, which was formerly known as Burma, in the 1990s.

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Bangladesh sets conditions to allow India-Mynamar pipeline

From The Financial Express, India
March 13, 2005
link to this article.

Bangladesh has set strict pre-conditions, including improving trade imbalance and transit rights to Nepal, for allowing the $1-billion Myanmar-India gas pipeline to pass through its territory.

Dhaka wants India to agree on giving it transit facility to Nepal, access to hydro-electricity from Nepal and Bhutan and reduction of trade imbalance for Bangladesh to approve of the tripartite pact on the gas pipeline.

“Bangladesh raised the demands at the first meeting of the techno-commercial working committee of Myanmar, Bangladesh and India on building of the 290-km pipeline late last month,� an official, who visited Yangoon, for the meeting said. However, ministry of external affairs has taken a strong exception to inclusion of bilateral issues in the tripartite treaty.

Foreign secretary Shyam Saran on March 8 shot off a letter to petroleum secretary SC Tripathi stating that bilateral issues should at no cost form part of the tripartite memorandum of understanding (MoU) that is to be signed by the three countries in Dhaka by this month end. MEA feels that Bangladesh, by including the bilateral issues in the tripartite MoU, is making Myanmar “guarantor� and may use Yangoon to pressurise New Delhi in implementing the ‘in-Principle’ agreement.

The official said Myanmar has indicated a price of $4.27 per million British thermal unit (MBTU) for its offshore gas which India wants to import through a pipeline passing through Bangladesh. “Myanmar is seeking a price equivalent to the price at which it sell natural gas to Thailand,� the official said. The delivered price of the gas on Indian borders, after including transit fee to be paid to Bangladesh, would be more than $5 per MBTU. This is 20% more than the price at which India will import Liquefied Natural Gas from Iran.

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Mosharrof Aiyer to discuss gas pipeline

Shahnaj Begum
From The Independent, Bangladesh
March 10, 2005
link to this article.

The government will extended an invitation to Indian Petroleum Minister Moni Shankar Aiyer to visit Bangladesh sometime in April.

Official sources expressed optimism that the proposed visit would provide an opportunity to Minister for Energy and Mineral Resources AKM Mosharrof Hossain to discuss bilateral matters, with his Indian counterpart. In exchange for allowing its territory for gas pipeline from Myanmar to India, Bangladesh wants corridor through India for trade with Nepal and Bhutan and for bringing electricity.

It is learnt that in a letter dated March 7 the Indian Petroleum Minister expressed his desire to discuss the issues relating to the gas pipeline, before signing the MoU.

The Energy Ministry yesterday prepared the invitation letter where it mentioned that it would provide an opportunity to make the discussions a success.

Earlier, AKM Mosharrof Hossain, sat across the table with the Indian Petroleum Minister Mane Shankar Aiyer and Myanmar Energy Minister Lun Thai in Myanmar in January last.

It is learnt that Bangladesh put certain conditions for allowing gas pipeline to run from Myanmar to India through its territory. Bangladesh's long pending request to India to allow land transit to Nepal, and import of hydro-electricity from Nepal and Bhutan will be the main agenda for the discussion.

A draft of the MoU was finalised in the first meeting of the Techno-Economic Working Committee on Myanmar-Bangladesh-India gas pipeline, which concluded in Yangon on February 25.

In the first meeting of the Techno-Economic Working Committee on Myanmar-Bangladesh-India gas pipeline, Bangladesh's delegation made it clear that the signing of the MOU would be contingent upon the effective resolution of bilateral issues between India and Bangladesh, in light of discussions held in Yangon on January 12 and 13 this year.

On the first day of the meeting, the Bangladesh delegation demanded that India assure Bangladesh of providing transit passage to facilitate transmission of hydroelectricity from Nepal and Bhutan to Bangladesh, sources said.

In its 8-point charter of demands, the Bangladesh team sought unhindered utilisation of an Indian land corridor for trading between Bangladesh, Nepal and Bhutan. The Bangladesh delegation also asked its Indian counterpart to take effective measures to reduce trade imbalance between the two countries. It submitted a list of some Bangladeshi products, which should be freed from tariff barriers imposed by the Indian government.

These conditions include Bangladesh's right to purchase gas from Myanmar, if need be, and management of the pipeline. It is learnt that one of the conditions put forward earlier said that Bangladesh would be the sole operator of the pipeline and would be entitled to use it as and when deemed necessary in its own interest, including export and import of gas whenever needed.

As per the decision of the meeting, the three countries would conduct their own feasibility studies and submit the reports within 6 months.
It is learnt that the MoU, after approval of the respective governments, might be signed in April next in Dhaka.

It is learnt that the committee has agreed to the proposal that the tri-nation pipeline would be built, owned and operated by an international consortium-company to be approved by the three countries concerned. Private and public sector companies of Myanmar, Bangladesh and India may also become partners in the international consortium.

UNB adds: Meanwhile, Indian Oil Minister Mani Shankar Aiyer and the envoys of Bangladesh, Myanmar and Pakistan have discussed the potentials of regional energy lifelines to get a fix in future for their fuel-starved economies.

Aiyer hosted a luncheon in New Delhi to say goodby to Bangladesh envoy Md Hemayetuddin who will take over as foreign secretary in Dhaka a week later. Myanmar's U Kyi Thein and Pakistan's Aziz Ahmad Khan were present.

Pipelines dominated the discussion Monday other than culture and history, that's what is going to be common among the four countries, with India negotiating gas supplies from the eastern and western borders, according to a report published in The Times of India Tuesday.

"It will be my top priority to improve ties, both economic and political, with all neighbours, especially India." Hemayetuddin said, adding that the energy lifelines will change the flavour of regional relations.

The Bangladesh envoy, however, landed in a bit of diplomacy on the subject of Bangladesh gas export to India, a politically touchy subject back home.

"We would prefer to be considered Qatar of Asia than any other countries..." he said.

Hemayetuddin was only replying to an anecdote, recounted by one of the invitees at the luncheon, of a past conversation between two diplomats who felt Bangladesh was wasting an opportunity to be rich by refusing to export gas.

But behind those remarks lay a hint that gas export was possible, only it will take a little time, The Times of India said. Aiyer was quick to react, "We're ready to wait for Bangladesh to decide when they want to sell gas. Whenever they do, we're there."

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Daewoo Drills Natural Gas in Myanmar Again

Na Jeong-ju
From The Korea Times
March 4, 2005
link to this article.

Daewoo International has successfully produced natural gas from its second test drilling of a gas mine in Shwe, Myanmar, where it found a 140-meter-thick reserve spanning a few kilometers.

The firm said commercial success in its gas development project in Myanmar is likely following the successful test.

"We drilled gas amounting to 96 million cubic feet a day from the reserve. Tests show the density of the gas is very fine and good for commercial use," it said.

In January, the firm test-drilled the Shwe mine, estimated to contain about four to six trillion cubic feet of gases. The amount is equivalent to 0.7-1.1 billion barrels of petroleum and 80-120 million tons of liquefied natural gas, according to Daewoo officials.

"We plan to conduct two more test drillings until June on the area and finalize our surveys before pumping gases out for sale," a Daewoo official said.

Daewoo is exploring the sea bottom of Shwe Phyu and Ngwe near Shwe to find other reserves. Drilling experts say huge mines may exist in Shwe Phyu and Ngwe, where Daewoo is participating as a main investor for commercial development of natural gases.

Daewoo is expected to earn at least 100 billion won in net profit annually for 20 years from 2010 from the Myanmar projects once gas production begins at the mining zone.

Investors rushed to buy Daewoo shares in the Seoul stock market after hearing news of the successful test drilling. In the morning session, Daewoo's stock price soared by 12 percent to 14,450 won.

Daewoo has a 60 percent stake in the natural gas development project in Shwe. Korea Gas Corp. and two Indian firms are taking part as minor investors.

Daewoo is currently carrying out projects to develop gas mines in Oman, Vietnam and Myanmar. It is also a member of a business consortium exploring oil fields in Peru.

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Tri-nation gas pipeline: No deal unless Delhi meets three conditions, says Dhaka

From The Independent, Bangladesh
March 3, 2005
link to this article.

Bangladesh rejected an Indian offer to construct an Indo-Bangladesh rail track and also set conditions for signing deal on the planned trination gas pipeline.

Indian side placed the proposal for cross-border railway in the recent technical committee meeting on the proposed trination gas pipeline in Myanmar.

Bangladesh made it clear that it would not sign the deal on installation of the trination gas pipeline unless India met its three preconditions concerning land transit and trade gap.

The conditions have it that India would have to allow Bangladesh to export its goods to Nepal and Bhutan through its corridor; allow the import electricity from Nepal through Indian territory; and take measures to reduce the trade imbalance with Bangladesh.

State Minister for Energy AKM Mosharraf Hossain made clear Dhaka's stance while talking to reporters at his office in the Bangladesh Secretariat yesterday.

He, however, said the Indian side agreed to accept the conditions before the signing of the memorandum of understanding (MoU) at the trination technical committee meet last week.

"Bangladesh won't sign the deal on the trination gas pipeline unless its three conditions are accommodated in the deal," he said.

Getting such a positive signal from India, the Energy Ministry has sent a note recently to the Prime Minister's Office (PMO) seeking its directive to two other relevant ministries - Ministry of Power and the Ministry of Commerce - to prepare the proposals in detail regarding the conditions.

The proposals should be prepared as soon as possible, the minister said.

"We need to immediately inform India about our conditions as to what we want and when," he said adding, the MoU would need to mention the specific timeframe about the matters.

Mosharraf said a decision was made in the meeting of the trination technical committee to appoint an international consulting firm to conduct a comprehensive study to ascertain the feasibility of the gas pipeline.

He said the international consortium, which would implement the proposed gas pipeline project, would finally bear the cost of the feasibility study. But initially the three countries might bear the cost.

The state minister said earlier it was decided by the three nations to hold the next meeting of the technical committee in Dhaka in April to sign the MoU on the proposed pipeline project. "But now it is not clear whether signing the MoU would be possible in April as the whole matter needs more time to finalise."

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Delhi agrees to Dhaka's strings to gas pipeline

Sharier Khan
From The Daily Star, Bangladesh
March 1, 2005
link to this article.

India has agreed to Bangladesh proposal to give it corridor access for Nepal and Bhutan's hydropower and trade of various commodities.

At a two-day meeting on Tri-Nation Gas Pipeline in Yangon that concluded on Friday, India also agreed to work on reducing its trade imbalance with Bangladesh on the basis of an "agreed framework", said sources close to the Bangladesh delegation to the Yangon meeting.

The two-member Bangladesh team insisted on these three issues in exchange of allowing India to enjoy energy security through a transnational gas pipeline that will pass through Bangladesh, the sources said.

Bangladesh however immediately needs framing specific proposals for purchase of hydropower from Nepal and Bhutan since there is no such proposal as yet, the sources pointed out.

Similar proposals to increase export-import with Nepal and Bhutan should also be framed for discussion with India so that Bangladesh can pinpoint how and where it wants a corridor through India.

On these proposals, Dhaka will have final understanding with New Delhi and sign a bilateral agreement before signing a tri-nation gas pipeline agreement.

Dhaka will just lag behind unless it can present such proposals at the coming tri-nation gas pipeline meeting, the sources said.

If all goes well, practical work for the gas pipeline might start after a year, they thought.

Back in January, at the minister-level meeting on tri-nation pipeline in Myanmar, Bangladesh and India had also agreed on the corridor access to Nepal and Bhutan and the need for steps to reduce trade gap. State Minister for Energy AKM Mosharraf Hossain on his return from that meeting had categorically said Dhaka would not sign the tri-nation agreement unless New Delhi signed the bilateral treaty with Bangladesh.

But cancellation of the Saarc summit gave rise to doubts on whether this understanding will continue.

At last week's meeting, the six-member Indian delegation was not open to these proposals on the first day. But they eventually agreed as Bangladesh pointed out this pipeline would mainly benefit India and that why Bangladesh would agree to give it (India) pipeline access unless it got similar benefits.

The Indian team also distributed a paper suggesting it wanted rail transit through Bangladesh and another paper showing the status of Indo-Bangladesh relations. The Indian side also went on saying Nepal does not have enough hydropower to sell.

"In this negotiation over the tri-nation pipeline, Bangladesh's concern was to ensure a balance between the three countries. This is why Bangladesh insisted on involving an international consortium to set up the gas pipeline," one source said.

As per the proposal, the transnational pipeline will begin from Myanmar to transmit gas to India's Tripura and then enter Bangladesh in the east and pass through the west to West Bengal of India.

Under this plan, Tripura will pump gas in the pipeline that will transmit it to West Bengal through Bangladesh. This makes Myanmar a weak party in the deal.

If Myanmar has no gas, the pipeline will continue to serve India as long as it goes through Bangladesh. This is why the project needs a balanced approach and involvement of an international consortium, sources mentioned.

Besides, it will make it easy for Bangladesh to ask for due wheeling charge from a company than from a nation like India.

The three nations agreed to sign a Memorandum of Understanding (MoU) in March or April. Under this MoU, a tri-nation project committee will be set up for a detailed technical report.

The project committee will be given six months to review and recommend various tariffs, the places through which the pipeline will pass and various types of detailed agreements. The agreements would include sales and purchase, use of Bangladesh land, and with Gas Transmission Company Ltd (GTCL) for its sole rights to operate the pipeline inside Bangladesh.

Although the pipeline was conceived eight years ago, Myanmar had in recent times started hammering on the idea. The Myanmar government then invited Bangladesh and India to sit on energy issues in Yangon in early January. The minister-level meeting ended with a positive note.

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