Weekly Business Roundup (January 23, 2009)

By WILLIAM BOOT

India’s Pursuit of Burmese Gas Continues

Another Indian company will begin exploratory drilling off the coast of Arakan in western Burma in a new bid for gas and oil ahead of a visit to Burma by India’s Vice-President Hamid Ansari.

The main focus of the visit, expected in early February, is to press the Burmese junta to sell India gas, according to Indian newspaper reports and industry analysts.

India lost out to China in an earlier attempt to buy a huge tranche of gas from the Shwe field off the coast of Arakan.

Indian state companies onGC and GAIL are involved with South Korea’s Daewoo in delivering gas from blocks A1 and A3 in the Shwe field.

However, another Indian firm, Essar E&P, will shortly carry out exploratory drilling in block A2 of the same field.

“India is still smarting from the slap in the face it got from the junta when China used its stronger political influence to secure the Shwe gas, especially when India had been long-time favorite to buy,” said Bangkok-based energy industries consultant Collin Reynolds this week.

“But clearly they have not given up hope. Gas is definitely on Ansari’s shopping list, as well as hydroelectric projects India is desperate to start in western Burma to feed energy hungry northeast India.”

The Shwe Gas Movement NGO, which campaigns against the export of Burma’s natural resources, also believes the Indian vice-president’s visit will include talks about buying gas.


Canadian Firm Faces U.S. Scrutiny over Copper Mine

Burma’s biggest copper mine operation has been hit with financial sanctions by the US government.

In a new tranche of sanctions aimed at the assets of the Burmese military junta leadership, the US Treasury Department's Office of Foreign Assets Control has added the Myanmar Ivanhoe Copper Company Limited (MICCL) to its banned list, which freezes all assets and transactions linked with or via the U.S.

The OFAC describes the mine company as a joint venture owned or controlled by the Burmese state to operate the Monywa copper project in Sagaing Division.

The mine has been jointly operated by Canada-based Ivanhoe Mines, which claims to have withdrawn from active business in 2007 after placing its 50 percent stake in the hands of an “independent” but unnamed third party trust.

However, the Canadian Friends of Burma NGO says there is no evidence that Vancouver-based Ivanhoe has withdrawn. It says the Canadian firm has refused to identify the trust.

“For far too long, Ivanhoe Mines and its chairman Robert Friedland have been able to avoid facing serious questions about their extremely reprehensible business relationship with Burma's generals,” said a statement from the NGO in Ottawa.

“[Ivanhoe] and the [junta] generals made millions from the Monywa copper project and sadly all the people of Monywa got in return was poisoned farmland.”


Israel Interested in Burma’s Surplus Bean Crop

Burma businesses are attempting to develop new trade links with Israel, which potentially offer a new buyer for surplus Burmese bean crops in return for much-needed agricultural fertilizer.

The Myanmar Federation of Chambers of Commerce and Industry says it is expecting an Israeli trade delegation in May following a federation team visit to the Middle East last month.
The chamber says Israel has expressed interest in buying pulse crops from Burma following the collapse of negotiations by Indian wholesalers to buy up to 1 million tons.

The Indians quit the talks because of what they complained were inflated prices by Burmese wholesalers and bought from Vietnam instead.

Israel has had links with Burma for many years, although government officials deny that Israeli weapons are still supplied to the junta.

However, reports persist that the Burmese army’s MA-1 rifle is strikingly similar to the Israeli army Galil rifle.

The Internet encyclopedia source Wikipedia says Israeli armaments, including artillery pieces and mortars, are used by the Burmese army.

Fellow Asean members Vietnam and Indonesia formally criticized Israel’s invasion of Gaza which caused the deaths of nearly 1,000 civilians, but Burma’s government made no comment.


Burma-Bangladesh to Resume Talks on Sea Dispute

High-level talks are due to resume between Bangladesh and Burma over their offshore territorial waters dispute, which involves potentially rich reserves of oil and gas.

The two countries claim the same block of sea in the Bay of Bengal where South Korea’s Daewoo International last year began exploratory drilling for oil and gas.

Daewoo withdrew from the drilling after naval vessels from both countries confronted one another around the drilling rig.

The South Koreans later claimed they ceased drilling because the probe was unfruitful but said they would carry out undersea tests elsewhere in the vicinity.

Daewoo has a license from the state Myanmar Oil and Gas Enterprise to explore what it calls its AD-7 block.

Urgent government-level talks were held between Bangladesh and Burma in late November on the dispute—which has simmered for years—but nothing was resolved, except agreement to schedule another meeting in late January-early February.

In the meantime, Bangladesh has held national parliamentary elections and has a new democrat government, and Daewoo has quietly resumed exploratory probes with the Burmese junta’s approval.

Burma and Bangladesh are increasingly under pressure from the United Nations to make final submissions to the Law of the Sea Convention for a binding ruling on the disputed boundaries.