March 22, 2012 / 8:41 AM / 6 years ago

Myanmar still not open on oil, gas wealth - activists

BANGKOK, March 22 (Reuters) - Myanmar’s civilian government has made no attempt to show transparency in its lucrative oil and gas dealings despite moves to improve other aspects of the economy and a wave of political reforms, an environmental and rights group said on Thursday.

Details of how much revenue the country is making from oil and gas, its biggest source of income, is being hidden from the public and kept off the national budget, just as it was under the military junta that ceded power last year, according to the Arakan Oil Watch group.

“Military leaders have been exporting these resources for over a decade, leaving the people to suffer from chronic energy shortages and some of the lowest development indicators in the world,” the group said in a report titled “Burma’s Resource Curse”.

The group has compiled a detailed study, citing information from former state officials now living overseas, of how much was being made and where revenue was being kept.

The information could not be verified by Reuters.

The group alleged some revenue from gas exports was being paid by foreign firms into offshore bank accounts of the military-owned Union of Myanmar Economic Holding Limited (UMEHL), circumventing the Finance Ministry.

Oil and gas income is expected to rise significantly as Myanmar’s neighbours - from China and India to Thailand and Bangladesh - exploit its natural gas fields, hoping they can feed their own fast-growing energy needs.

The group said the secrecy and lack of accountability made for a “perfect enabling environment for corruption” in Myanmar, which is also known as Burma and is one of the world’s most graft-ridden countries.

The group also denounced the lack of information over how much oil and gas companies paid to the government in royalties, profit-sharing, signing bonuses, fees and taxes, plus profits from joint ventures.

It estimated that revenue from natural gas exports from its M9 block had netted a profit of $3.86 billion, while the Shwe Gas pipeline to southern China, which is due to be completed in 2013, would earn state firms $29 billion over a 30-year period, plus an annual transit fee of $150 million.

Myanmar has invited firms to bid for its onshore and offshore oil and gas reserves. The process has been dominated by Asian companies, with Western firms held back by sanctions, although these could start to be lifted in coming months, according to diplomats.

In January, its Energy Ministry pegged natural gas reserves at 22.5 trillion cubic feet, almost double the 11.8 trillion estimated by oil major BP last year.

In its biggest energy tender in years, Myanmar awarded 10 of 18 onshore oil and gas blocks to eight firms in January, with Malaysia’s Petronas and Thailand’s PTT Exploration and Production snapping up two deals each. Another tender for six onshore oil and gas bloc is expected soon. (Reporting by Martin Petty; Editing by Alan Raybould and Robert Birsel)

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