Myanmar gas reserves behind India’s soft line on junta acts

If India has not been too critical of the junta rule in Myanmar or the long detention of Suu Suu Kyi or human rights violations, there is a reason -- the possibility of exploring avenues in gas-rich Myanmar.

Upstream oil majors — Oil India, GAIL and ONGC — are again scouting for opportunities in gas-rich Myanmar to meet the country’s increasing energy demand.

While Oil India is looking at Myanmar gasfields that are operational, exploration firm ONGC and gas transporter GAIL (India) Ltd have secured stakes in gas field development and onshore pipeline projects there. Indian firms had earlier bagged blocks in Myanmar but failed to get the gas to India partly because of the absence of a pipeline.

The reason for the focus on Myanmar is that it has proven gas reserves of 19 trillion cubic feet (tcf) with vast areas yet unexplored.

“We are looking at acquiring stakes in Myanmar … we are in an advanced stage and would be able to share the details once finalised,” N.M. Borah, chairman and managing director of Oil India, has said. He said the company would look at acquiring overseas energy assets, which were already producing hydrocarbon, rather than those in the exploration stage.

“Looking at global opportunities is part of the company’s strategy for energy security. The government chips in through its diplomatic efforts,” he said. “We want to grow inorganically. It is a conscious decision to accelerate efforts for opportunities abroad. We are continuously on the job ... 35 per cent of our time is spent evaluating overseas proposals,” T.K. Ananth Kumar, director finance of Oil India, said. He said the firm had kept a war chest of about Rs 4,000 crore ready for such opportunities arising this fiscal.

The government has decided to help state-owned firms secure assets or participatory interest in oil and gas blocks across the globe by asking its diplomats to help them wherever need be.

It had recently approved investments of $1.33 billion by ONGC and GAIL in gasfield development projects in Myanmar. The gas will be shipped to China. ONGC Videsh and GAIL will invest in the pipeline being constructed by China National Petroleum Corp (CNPC) to transport gas found in block A-1 and A-3 off the Myanmar coast.

Oil ministry sources said discussions were being held with the finance ministry for the creation of a sovereign fund to help the state-owned firms compete with China in acquiring global oil and gas assets and ensure energy security. “We have proposed a $20-billion sovereign fund, but it is up to the finance ministry to work out the numbers and the model. There is unanimity of view in the government that such a fund should be set up as the country’s energy demands are expected to increase and acquisitions abroad are the only way to ensure energy security,” an official said.

China has set up a $300-billion sovereign fund to help its energy firms scout for assets abroad.

Given the fact that the country’s crude imports for meeting energy requirement is expected to rise to 90 per cent by the year 2030 from 78 per cent at present, as the domestic production of crude oil stagnates for want of new major discoveries, there is a need for India to have a fresh look at the energy strategy.

- Asian Tribune -