Just before Natwar visit, Myanmar backs out on oil deal

A recent turnaround by Yangon on its earlier commitment to allow Indian oil and gas companies to carry out on-shore exploration in Myanmar w...

A recent turnaround by Yangon on its earlier commitment to allow Indian oil and gas companies to carry out on-shore exploration in Myanmar will be high on External Affairs Minister K Natwar Singh’s agenda during his four-day visit to the country starting Thursday.

It’s learnt that Myanmar has retracted from its earlier position to allow a consortium of Oil India Ltd, Gas Authority of India Ltd and Indian Oil Corporation to place bids for exploration activity in blocks RSF 5, RSF 6 and RSF 9. This was conveyed as late as March 7 while the bids were to be placed by mid-March.

The fax from Myanmar’s Ministry of Energy on March 7 stated that its government had decided to reserve on-shore exploration for Myanmar Oil and Gas Enterprise (MOGE), a state-owned company. In other words, doors have been shut to foreign companies to pick up on-shore blocks.

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This came as a rude shock to the Indian consortium which had finalised its bids after an official delegation of Myanmarese energy representatives headed by a deputy minister met the Petroleum Secretary here on February 18-19. In fact, Myanmar had conveyed in late January that it would welcome the Indian consortium to bid for RSF 5 and RSF 9 blocks.

Subsequently, India evinced interest to bid for exploration in the RSF 6 block, which has apparently been vacated by Westburne oil company. The Myanmarese delegation, which was accompanied by Myanmar’s envoy here, agreed to this and made an offer last month.

A technical team then visited Myanmar to seek more clarifications and returned on March 5. But two days later, sources said, they were stumped by this fax from Yangon stating that it had decided to reserve on-shore exploration for MOGE and expressed apologies for the inconvenience.

Natwar Singh will look to draw Yangon’s attention to its earlier commitment and underline India’s interest in furthering oil and gas exploration activity in Myanmar. Sources said the reasons for Yangon’s turnaround is still unclear though there are doubts over MOGE’s financial links with other East Asian countries including China.

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It may be noted that ONGC Videsh Ltd has picked up stakes in A1 and A3 blocks for off-shore exploration. But here again, problems have cropped in the A3 block where Daewoo too is involved. In this context, India will re-emphasise its willingness to iron out differences and strengthen the bilateral relationship as envisioned during Myanmar Head of State Than Shwe’s visit last October.

Besides this, India is said to be working out a defence package for Yangon. Though Singh is not expected to spell out the details, sources said, New Delhi will show its inclination to help Yangon in rooting out camps of N-E insurgents on its side of the border.

There was hope that agreements on some of the major infrastructure projects with Myanmar may be signed during the visit, but Yangon was unable to finalise some of the documents. Singh will, however, make an assessment of projects like Kaladan and the Tamanthi hydro-electric project during his visit.