Forging relations with Myanmar for meeting energy need
Wednesday, 20 October 2010
Asif Mahfuz
Myanmar is currently the centre of focus of East Asian energy politics. Along with Myanmar, Bangladesh is also now on the focus, since these two countries have access to the energy rich Bay of Bengal. Though these two countries were always important as balancing factors among regional powers like India, China and Pakistan, now due to global energy crisis, geographical position, the competition between them for minerals resources, and nuclear potentiality is high.
In this eco-political tug of war, the importance of Myanmar is more than that of Bangladesh due to the abundance of natural resources and the rule of military junta. Dictatorial rule means that many decisions can be taken without or by passing the consent of the people.
For example, one of the main energy sources of this area, natural gas is more abundant in Myanmar with a reserve of 81.03 TCF compared to Bangladesh's 15.51 TCF. Already Myanmar has contracts with China, India and Thailand for supplying natural gas and petroleum. Myanmar is also rich in mineral deposits. And moreover, there are potentials of finding more gas and oil deposits in the Bay of Bengal. These two countries' maritime boundary includes a major portion of the Bay of Bengal.
Both China and India are eager to establish their presence in this important region. There can be an alliance between Bangladesh and Myanmar.
India and China have fought war over pockets of land. India is always one of the major competitors of China in this region. Since china accepted Sikkim as a part of India and India in turn accepted Tibet as a part of china, things have normalised a bit. Now bilateral trade between the two countries is expected to surpass US$60 billion by 2010, making China the single largest trading partner of India.
But the competition -- economic and political -- still exists. And in this competition between these two countries for regional supremacy, Pakistan and North Korea have leaned towards China and Myanmar making a balance with better relations with china. Bangladesh is playing a neutral role. But ultimately, the economy and the need for energy will weigh high in relationship.
India has a historic relation with Burma. It was one of the leading supporters of Burmese independence. For many years, Indo-Burmese relation was strong due to cultural links, flourishing commerce, common interests in regional affairs and the presence of a significant Indian community in Burma. India provided considerable support when Burma struggled with regional insurgencies. However, when India condemned the suppression of democracy, Burma ordered the expulsion of the Burmese Indian community. Only China maintained close links with Burma while India supported the pro-democracy movement.
However, due to geo-political and energy concerns, India re-established its relations and recognised the new name of Myanmar in 1993. Now India is one of the biggest trade partners of Myanmar, but it is one sided, amazingly in favour of Myanmar.
India is a major buyer of Myanmar's oil and gas. In 2007-8, Indian exports to Myanmar totalled US$185 million, while its imports, mainly oil and gas, from Myanmar were worth approximately US$810 million. India is one of the few countries which provide military assistance to the junta.http://en.wikipedia.org/wiki/Foreign_relations_of_India - cite_note-83 Relations between the two remain close. In the aftermath of Cyclone Nargis, India was one of the few countries whose relief and rescue aid proposals were accepted by Myanmar's ruling junta. Recently, the head of the junta, general Than Shue made a state visit in India, where he was received by the Indian prime minister. Even Indian government justified its position by saying "we have an ideology, but we have no intent to export our ideology to other countries".
There are strong reasons for this cooperation along with the energy competition. Myanmar is situated to the south of the states known as seven sisters in Northeast India, and in the proximity of the People's Republic of China. This gives a strategic importance to Indo-Burmese relations. Insurgents in North-east India seek refuge in Myanmar. Consequently, India is keen on increasing military cooperation with Myanmar in its counter-insurgency activities. In 2001, Indian army completed the construction of a major road along its border with Myanmar.
India has built major roads, highways, ports and pipelines within Myanmar to increase strategic influence in the region and counter China in the Indochina peninsula. India has granted US$100 million credit to fund highway infrastructure projects in Myanmar, while US$ 57 million has been offered to upgrade Myanmar railways. A further US$27 million in grants has been pledged for road and rail project. In February 2007, India announced a plan to develop the Sittwe port, which will enable access to ocean from Indian Northeastern states like Mizoram.
Given access to this port, India can directly transport goods to the seven sisters by sea routes. Also India is keen to build a pipeline for gas and petroleum from Myanmar, through Bangladesh. This will be an advantage for Bangladesh as well. Although a tripartite agreement was signed by the respective governments in January 2005 for the construction of a US$1 billion, 290km natural gas pipeline from the Shwe Field in Myanmar to the Indian states of West Bengal/Bihar across Bangladesh, the project appears to have been shelved.
This pipeline provides an opportunity not only for isolated gas reserves in the north eastern states of India (Tripura) to be injected into the pipeline, but also for Bangladeshi gas to be distributed nationally. Bangladesh will also get approximately US$125 million in annual transit fees.
Now, India is pursuing alternative means of bringing gas from Myanmar, a pipeline through the north eastern corridor, bypassing Bangladesh. The high cost and security, however, are a huge concern.
Anil Razdan, India's former additional and special secretary in the petroleum ministry, said: "Our energy security lies in building gas pipelines based on intergovernmental ownership with neighboring countries like Iran, Bangladesh, Myanmar and an undersea link from the Gulf, with international multilateral funding."
Indian companies, along with the Chinese ones, are the first to participate in oil and natural gas exploration in Myanmar. Almost all the exploration blocks have been awarded to companies of either of the two countries.
China is supporting Myanmar against blockade by the international community and also supplying conventional arms and other technologies. It is suspected that the Myanmar Jaunta is going Nuclear. Even in this case, China's support through North Korea and Pakistan is likely. Chinese oil and gas companies are aggressively engaged in the Bay of Bengal in exploration and production activities to supply the gas through pipelines, linking offshore platforms in Myanmar to Kunming in China and to the new refinery in Chongqing municipality. According to the China Securities Journal, work on two new pipelines commenced in September 2009 (Reuters, June 17). The 2,806 km long natural gas pipeline, with a capacity of 12 billion cubic meters, annually to Kunming will be ready by 2012. The second 1,100 km pipeline for oil, with a capacity of 400,000 barrels per day (bpd), will run between Kyaukphyu in Myanmar and Guizhou and Chongqing municipality, via Kunming.
Besides the oil and gas pipelines, China and Bangladesh along with Myanmar have decided to build the 900 km Kunming Highway linking Chittagong with Kunming through Myanmar to facilitate greater trade. There are ideas that Bangladesh may offer Chittagong port for development to China, for commercial purposes, but which could also be used for staging Chinese naval assets. This is to be expected and can be reasonably tied to the Chinese development of Gwadar port in Pakistan and Hambantota port in Sri Lanka.
At another level, China has cultivates its relations with Bangladesh and has emerged as a mediator in the latter's international disputes. In November 2008, Bangladesh and Myanmar (Burma) deployed their navies in a standoff in the Bay of Bengal over Myanmar's decision to issue licenses to oil companies to undertake survey activity in disputed waters. China National Petroleum Corp (CNPC) was awarded a block that falls into those belonging to Bangladesh. Dhaka requested Beijing to mediate. The standoff ended after Bangladesh and Myanmar agreed to resolve the issue through negotiations.
For Bangladesh the message is clear. To meet its own need for energy, taking the lead from Indian and China, it has to make deals with Myanmar and get a share of the pie.
The writer is a faculty on leave of the business of Eastern University, Now working for the Duke of Edinburgh's Award foundation, as the national director. He can be reached at e-mail: partho_iba@yahoo.com
Myanmar is currently the centre of focus of East Asian energy politics. Along with Myanmar, Bangladesh is also now on the focus, since these two countries have access to the energy rich Bay of Bengal. Though these two countries were always important as balancing factors among regional powers like India, China and Pakistan, now due to global energy crisis, geographical position, the competition between them for minerals resources, and nuclear potentiality is high.
In this eco-political tug of war, the importance of Myanmar is more than that of Bangladesh due to the abundance of natural resources and the rule of military junta. Dictatorial rule means that many decisions can be taken without or by passing the consent of the people.
For example, one of the main energy sources of this area, natural gas is more abundant in Myanmar with a reserve of 81.03 TCF compared to Bangladesh's 15.51 TCF. Already Myanmar has contracts with China, India and Thailand for supplying natural gas and petroleum. Myanmar is also rich in mineral deposits. And moreover, there are potentials of finding more gas and oil deposits in the Bay of Bengal. These two countries' maritime boundary includes a major portion of the Bay of Bengal.
Both China and India are eager to establish their presence in this important region. There can be an alliance between Bangladesh and Myanmar.
India and China have fought war over pockets of land. India is always one of the major competitors of China in this region. Since china accepted Sikkim as a part of India and India in turn accepted Tibet as a part of china, things have normalised a bit. Now bilateral trade between the two countries is expected to surpass US$60 billion by 2010, making China the single largest trading partner of India.
But the competition -- economic and political -- still exists. And in this competition between these two countries for regional supremacy, Pakistan and North Korea have leaned towards China and Myanmar making a balance with better relations with china. Bangladesh is playing a neutral role. But ultimately, the economy and the need for energy will weigh high in relationship.
India has a historic relation with Burma. It was one of the leading supporters of Burmese independence. For many years, Indo-Burmese relation was strong due to cultural links, flourishing commerce, common interests in regional affairs and the presence of a significant Indian community in Burma. India provided considerable support when Burma struggled with regional insurgencies. However, when India condemned the suppression of democracy, Burma ordered the expulsion of the Burmese Indian community. Only China maintained close links with Burma while India supported the pro-democracy movement.
However, due to geo-political and energy concerns, India re-established its relations and recognised the new name of Myanmar in 1993. Now India is one of the biggest trade partners of Myanmar, but it is one sided, amazingly in favour of Myanmar.
India is a major buyer of Myanmar's oil and gas. In 2007-8, Indian exports to Myanmar totalled US$185 million, while its imports, mainly oil and gas, from Myanmar were worth approximately US$810 million. India is one of the few countries which provide military assistance to the junta.http://en.wikipedia.org/wiki/Foreign_relations_of_India - cite_note-83 Relations between the two remain close. In the aftermath of Cyclone Nargis, India was one of the few countries whose relief and rescue aid proposals were accepted by Myanmar's ruling junta. Recently, the head of the junta, general Than Shue made a state visit in India, where he was received by the Indian prime minister. Even Indian government justified its position by saying "we have an ideology, but we have no intent to export our ideology to other countries".
There are strong reasons for this cooperation along with the energy competition. Myanmar is situated to the south of the states known as seven sisters in Northeast India, and in the proximity of the People's Republic of China. This gives a strategic importance to Indo-Burmese relations. Insurgents in North-east India seek refuge in Myanmar. Consequently, India is keen on increasing military cooperation with Myanmar in its counter-insurgency activities. In 2001, Indian army completed the construction of a major road along its border with Myanmar.
India has built major roads, highways, ports and pipelines within Myanmar to increase strategic influence in the region and counter China in the Indochina peninsula. India has granted US$100 million credit to fund highway infrastructure projects in Myanmar, while US$ 57 million has been offered to upgrade Myanmar railways. A further US$27 million in grants has been pledged for road and rail project. In February 2007, India announced a plan to develop the Sittwe port, which will enable access to ocean from Indian Northeastern states like Mizoram.
Given access to this port, India can directly transport goods to the seven sisters by sea routes. Also India is keen to build a pipeline for gas and petroleum from Myanmar, through Bangladesh. This will be an advantage for Bangladesh as well. Although a tripartite agreement was signed by the respective governments in January 2005 for the construction of a US$1 billion, 290km natural gas pipeline from the Shwe Field in Myanmar to the Indian states of West Bengal/Bihar across Bangladesh, the project appears to have been shelved.
This pipeline provides an opportunity not only for isolated gas reserves in the north eastern states of India (Tripura) to be injected into the pipeline, but also for Bangladeshi gas to be distributed nationally. Bangladesh will also get approximately US$125 million in annual transit fees.
Now, India is pursuing alternative means of bringing gas from Myanmar, a pipeline through the north eastern corridor, bypassing Bangladesh. The high cost and security, however, are a huge concern.
Anil Razdan, India's former additional and special secretary in the petroleum ministry, said: "Our energy security lies in building gas pipelines based on intergovernmental ownership with neighboring countries like Iran, Bangladesh, Myanmar and an undersea link from the Gulf, with international multilateral funding."
Indian companies, along with the Chinese ones, are the first to participate in oil and natural gas exploration in Myanmar. Almost all the exploration blocks have been awarded to companies of either of the two countries.
China is supporting Myanmar against blockade by the international community and also supplying conventional arms and other technologies. It is suspected that the Myanmar Jaunta is going Nuclear. Even in this case, China's support through North Korea and Pakistan is likely. Chinese oil and gas companies are aggressively engaged in the Bay of Bengal in exploration and production activities to supply the gas through pipelines, linking offshore platforms in Myanmar to Kunming in China and to the new refinery in Chongqing municipality. According to the China Securities Journal, work on two new pipelines commenced in September 2009 (Reuters, June 17). The 2,806 km long natural gas pipeline, with a capacity of 12 billion cubic meters, annually to Kunming will be ready by 2012. The second 1,100 km pipeline for oil, with a capacity of 400,000 barrels per day (bpd), will run between Kyaukphyu in Myanmar and Guizhou and Chongqing municipality, via Kunming.
Besides the oil and gas pipelines, China and Bangladesh along with Myanmar have decided to build the 900 km Kunming Highway linking Chittagong with Kunming through Myanmar to facilitate greater trade. There are ideas that Bangladesh may offer Chittagong port for development to China, for commercial purposes, but which could also be used for staging Chinese naval assets. This is to be expected and can be reasonably tied to the Chinese development of Gwadar port in Pakistan and Hambantota port in Sri Lanka.
At another level, China has cultivates its relations with Bangladesh and has emerged as a mediator in the latter's international disputes. In November 2008, Bangladesh and Myanmar (Burma) deployed their navies in a standoff in the Bay of Bengal over Myanmar's decision to issue licenses to oil companies to undertake survey activity in disputed waters. China National Petroleum Corp (CNPC) was awarded a block that falls into those belonging to Bangladesh. Dhaka requested Beijing to mediate. The standoff ended after Bangladesh and Myanmar agreed to resolve the issue through negotiations.
For Bangladesh the message is clear. To meet its own need for energy, taking the lead from Indian and China, it has to make deals with Myanmar and get a share of the pie.
The writer is a faculty on leave of the business of Eastern University, Now working for the Duke of Edinburgh's Award foundation, as the national director. He can be reached at e-mail: partho_iba@yahoo.com