Weekly Business Roundup (February 27, 2009)

By WILLIAM BOOT

Thai-Chinese Oil, Gas Deals Voided by Junta Inaction

China’s steady expansion in Burma’s oil and gas reserves has suffered a setback—due to the military regime’s bureaucracy.

The Chinese state-owned China National Offshore Oil Corporation last year signed agreements with Thailand’s state oil explorer PTTEP to swap stakes in several exploration site licenses both on and offshore in Burma.

Some of these 20 percent swaps have now unraveled, timed out by the failure of the Burmese authorities to approve them, says PTTEP in a statement to Thai shareholders this week.

The agreements covered four offshore and onshore blocks still being explored by the companies.

They involved PTTEP giving a 20 percent stake in offshore gas blocks M3 and M4 in the Gulf of Martaban to CNOOC in exchange for a 20 percent share of the Chinese company’s A4 and C1 blocks.

The A-4 is also offshore but on the west coast. C-1 is onshore in the west coast region and covers more than 15,000 square kilometers where there is potential to strike oil.

PTTEP said in its statement to the Stock Exchange of Thailand, “The contract for participation interest swap has already expired before receiving an approval from the Myanmar government, which causes the contract to be invalid.”

But PTTEP made mention of the 20 percent stake it had separately agreed to sell to CNOOC in its big offshore M-9 gas field concession in the Gulf of Martaban.

PTTEP last year invited the Chinese into the M-9 field, where the Thais have confirmed discovery of at least 1.75 trillion cubic feet (50 billion cubic meters) of recoverable natural gas, to help share the estimated US $1 billion development costs.

Separately, PTTEP and its parent company PTT are still discussing the terms of letting CNOOC take a 20 percent development investment share in its currently 100 percent concession on the M-9 offshore block in Myanmar waters of the Gulf of Martaban.

Thai Gems Trade Faces Tougher Tests for Burmese Stones

The new Thai government of Democrat Abhisit Vejjajiva is telling several ministries to pressure the country’s gems industry to conform more to US sanctions against the Burmese military government.

A statement from the Ministry of Commerce says it is now working with
“state agencies and industry bodies to urge rough-gem traders to adhere to stricter standards.”

It says the action follows a tightening of rules in the US barring the import of stones sources from Burma and requiring stricter certification to verify origins.

The ministry said there is a need to persuade small and medium sized traders operating in Thailand—mainly Bangkok—to comply with US customs requirements.

The US has banned the import of rubies and jade-related products from Burma, including gems that were mined in Burma and processed, treated or manufactured into jewelry in third-party countries.

The ministry did not say what form the new action would take, but said it will work with officers from the ministry of finance as well as Thai Gem and Jewelry Traders Association.

Gems and jewelry are Thailand’s fourth-largest export industry in value, with exports valued in 2008 at more than US$8 billion, according to the Bangkok commerce ministry.

Junta to Lure Chinese Tourists with Easier Visas

In a bid to boost the flagging tourism industry, the Burmese military authorities are to give visa-on-arrival facilities to all Chinese arriving at the border near Myitkyina in northern Kachin State.

Until now, Chinese could cross only as far as Myitkyina unless they obtained a special visa from the Burmese consulate in the Yunnan Province capital of Kunming.

Now Chinese can get a visa at the border to visit a large part of Burma, including Rangoon, Mandalay and Bagan, reports the official Chinese news agency Xinhua.

The easier access follows the opening of a new airport at Teng Chong on February 16, which will give access to Burma for many more Chinese from much further afield.

Booming Vietnam Looks to Burma for Increased Trade

Trade between Asean member countries Burma and Vietnam grew by 11 percent last year to more than US $100 million, and the Vietnamese are keen to boost it still further this year despite the global recession.

Vietnam is still the strongest economy in Southeast Asia and last year chalked up growth of 8 percent.

Plans for expanding bilateral trade were discussed at a conference in Ho Chi Minh City this week attended by ministry officials and representatives from 50 companies from both countries, said the official Vietnam News Agency.

“The two countries still have great business potential to be tapped, especially in the sectors of agriculture and forestry, textiles and garments, electronics, electrical appliances, medical and pharmaceutical equipment and consumer goods,” the agency said, quoting Vietnam’s Ministry of Industry and Trade spokesman Phan Hao.