Thai state energy giant buys 30 years of gas from junta

Saturday, 31 July 2010 09:05 Perry Santanachote

Chiang Mai (Mizzima) – Thailand’s sole purveyor of natural gas, PTT, in Naypyidaw today signed a 30-year gas sales deal with affiliate PTT Exploration and Production and the junta-run Myanma (sic) Oil and Gas Enterprise, the Thai energy minister told a press conference in Bangkok.

Activists however continue to call on firms to pull out of providing such material support to the Burmese regime, which engages in widespread human rights abuses.

PTT Public Company Limited (PTT) signed the agreement with its subsidiary PTT Exploration and Production (PTTEP) for gas from the Zawtika field at the offshore Block M9 and part of Block M11 in the Gulf of Martaban, 185 miles (300 kilometres) south of Rangoon. State-controlled PTTEP will begin extractions in 2013, Thai Energy Minister Dr. Wannarat Channukul told a press gathering on Thursday.

The Institute of Developing Economies (IDE), a non-profit research group based in Japan, reported that natural gas exports in Burma amounted to US$2.5 billion in the fiscal year 2007-2008, which was 40 per cent of the country’s total exports. The increase in foreign reserves that same year amounted to more than US$1 billion. The export of natural gas to Thailand in 2007 was estimated by the International Monetary Fund (IMF) to account for 55 per cent of the military junta’s revenue.

PTTEP was expected to supply an initial 240 million cubic feet per day (mmscfd) to Thailand and another 60 million mmscfd to Burma, according to Wannarat. The field has an estimated reserve of 1.4 trillion cubic feet.

Wannarat said the increased output would raise Thailand’s gas imports from Burma to 1.2 billion cubic feet per day and plans were under way to lengthen the Trans-Asean gas pipeline by 137 miles. He also stated the new supply would help reduce imports of bunker oil by about 2.4 billion litres a year and save the country about 400 billion baht annually.

“This is good news for Thailand as PTT has succeeded in finding an overseas energy source to ensure energy security for the country,” he said.

PTT currently buys natural gas under 10 agreements onshore and offshore in Thailand and two agreements from Yadana and Yetagun in Burma. The offshore gas fields in Burma have an output of 400 and 565 mmscfd respectively.

Thailand’s consumption of natural gas has seen steady yearly increases. Thais used 3,564 mmscfd last year, more than double the amount in 1999, the Energy Policy and Planning Office said, and paid Burma 84.2 billion baht (US$2.6 billion) for 30 per cent of it.

International campaigns continue to call on foreign companies to withdraw from Burma because of the ruling military junta’s human rights violations, which research shows the companies are complicit in because of tax revenues paid to the military government.

The Free Burma Movement, a coalition of human rights, pro-democracy and corporate responsibility advocates, particularly targets oil and gas companies.

Earth Rights International, the NGO most famous for using American courts to sue Unocal (now Chevron) for its complicity in murder, rape, torture, and forced labour during the construction of the Yadana gas pipeline in Burma, released a new report early this month linking the huge profits the Burmese regime received from gas projects led or managed by Total, Chevron and PTTEP to the junta’s secretive nuclear activities.

Last year Earth Rights International (ERI), citing confidential sources, accused the Burmese regime of using secret bank accounts in Singapore to hide of billion dollars in revenue it had received from the gas projects. ERI said early this month that that revenues from the gas project continued to be kept in Singapore and were neither included in Burma’s normal budget nor spent on the Burmese people.

Referring to allegations made by a prominent defector from the military’s weapons programme reported by DVB last month that the Burmese regime had sought nuclear and missile technology from Kim Jong-il’s increasingly isolated regime in North Korea, ERI said that instead of being used to pay for education and health care the funds had “enabled the country’s autocratic junta to maintain power and pursue an expensive, illegal nuclear weapons programme while participating in illicit weapons trade in collaboration with North Korea, threatening the domestic and regional security balance”.

Using documents released as part of ERI’s lengthy legal battle with the multinational firms operating in Burma and the latest market prices for natural gas, ERI stated in the new report titled, “Energy Security: How Total, Chevron, and PTTEP Contribute to Human Rights Violations, Financial Secrecy, and Nuclear Proliferation in Burma”, that from 1998 to last year the Burmese regime had received nearly US$5 billion (around US$416 million per year) from the multinational gas project, which it pointed out were led by two western firms, France’s Total and American Chevron.

Reports such as this and awareness campaigns by advocacy groups such as the Free Burma movement had attained some success in shedding light on the human impact such business involvement and gas purchases have, Nicky Black, author of Blood Money: Corporate Citizenship and the Oil and Gas Sector in Myanmar, said.

“Divestment campaigns have been highly successful at raising the international profile of the democracy movement in Myanmar [Burma],” Black said. “Through powerful, strategic public campaigns, they have made it illegal, through their role in encouraging formal sanctions, or reputationally untenable, for the majority of Western companies to invest in Myanmar [Burma].”

The Free Burma Movement has been less successful in discouraging investment by companies from Asian countries. Black’s report states that in 1999 an equal number of companies from the West and the East were involved in oil and gas development. Last year, 27 of the 30 companies involved were from Asia and Russia.

Mark Farmaner, director of rights advocacy group Burma Campaign UK, said the circumstances and political will that propelled Western companies to bend to social responsibility were almost non-existent in Asia.

“In Western countries questions of corporate social responsibility are well known and there is strong public, political and media interest in them,” Farmaner said. “In many Asian countries you don’t have this interest or strong civil society groups engaging in these issues, so companies in Asia don’t feel that pressure.”