Thursday, June 28, 2012

U.S. investments in Burmese oil, gas discussed at hearings

Thursday, 28 June 2012 13:32 Mizzima News

Allowing U.S. oil companies to invest in Burma’s rich off-shore oil and gas fields came up at the nomination hearing for Derek Mitchell to become the first U.S. ambassador to Burma since the early 1990s.

Mitchell told senators at a Foreign Relations Committee hearing on Wednesday that no U.S. business sectors have been ruled out of participating in investing in Burma, but at this time no decision has been made regarding energy companies.

Derek Mitchell, who has been nominated to become the new U.S. ambassador to Burma. Photo: U.S. gov

Speaking on Capitol Hill, Sen. Jim Webb said Mitchell’s nomination could be approved by the committee this week and then sent for a vote in the Senate.

In his statement to the committee, Mitchell said: "Perhaps the most important development of the past year, however, has been the partnership forged between Daw Suu Kyi and President Thein Sein. President Thein Sein has proven to be a remarkable figure. We should never forget to recognize his extraordinary vision and leadership, and for the many reformist steps he and his partners in government have taken over the past year. These actions have clearly reflected the aspirations, indeed sacrifices, of millions of brave Burmese."

In testimony, Mitchell said, “Each action we have taken in recent months has had as its purpose to benefit the Burmese people and strengthen reform and reformers within the system. This engagement should continue and expand,” according to wire reports.

He said the State Department has a “sector by sector” plan to renew private sector relations, and the White House has not decided if it will lift sanctions on Burma's energy industry, which is controlled by a non-transparent state oil company.

“There's nothing I can say here definitively on this, because it is an ongoing internal, interagency discussion,” Mitchell told the committee. “But ... we are not looking to exclude any sectors from this.”

Committee member Senator James Inhofe said there are “rumors” that the administration plans to “exclude oil firms from new rules allowing U.S. investment in the country,” and he argued that such a policy would be detrimental to U.S. companies as foreign firms continue to sign oil and gas exploration agreements with Burma.

“This or any other ‘carve-out strategy' would be a strategic mistake,” he said. “I believe that U.S. companies including the oil and gas companies can play a positive role in the effort by demonstrating high standards or responsibility, responsible business conduct, and transparency -- including respect for human rights in Burma.”

Opposition leader Aung San Suu Kyi expressed caution on foreign firms partnering with the state-owned Myanmar Oil and Gas Enterprise earlier this month in a speech in Geneva to the International Labour Organization. However, recent remarks in France regarding Total oil company’s role in one of Burma’s vast oil fields indicated she was open minded about the future of foreign investments so long as they were transparent and not detrimental to the people.

The Burmese government has said its natural gas reserves stand at 22.5 trillion cubic feet, and an international bidding process for 25 offshore oil and gas blocks is scheduled to take place within two to three months.

Webb, an early supporter of the U.S. engagement policy, called for the U.S. to offer more encouragement and acknowledgment for the reform process.

“This is a country whose political system remains a challenge, but where positive conduct calls for reciprocal gestures,” he said. “We should never take our concerns about political freedoms or individual rights off the table. We should make these concerns central to our engagement with all countries, including Burma. But we should also be promoting economic progress to sustain the political reforms that have taken place.”

Mitchell said he and the State Department have “no illusions” about the challenges that lie ahead in Burma. In his statement to the committee, he said: "Human rights abuses, including military impunity, continue, particularly in ethnic minority areas. Although there may be some hope for an end to the violence and establishment of serious dialogue on fundamental political issues, mutual mistrust between the government and ethnic minority groups runs deep and a long road lies ahead. Recent sectarian violence in Rakhine State demonstrates the divisiveness in Burma cultivated over many decades, if not centuries, that will need to be overcome to realize lasting peace and national reconciliation in the country."

“As Secretary [of State Hillary] Clinton has observed, reform is not irreversible," Mitchell warned. "And continued democratic change is not inevitable. We remain deeply concerned about the continued detention of hundreds of political prisoners and the conditions placed on those previously released, lack of the rule of law, and the constitutional role of the military in the nation’s affairs. Human-rights abuses, including military impunity, continue, particularly in ethnic minority areas.”

Mitchell currently serves as the State Department’s special coordinator for Burma policy.

Leave a Reply