Junta claims huge gas reserves found in central Burma

Friday, 07 January 2011 21:43 Thomas Maung Shwe

Chiang Mai (Mizzima) - Burma’s state media announced Thursday that SIPC Myanmar Petroleum Co. Ltd’s ongoing exploration project in Magwe division had uncovered gas reserves in the Pahtolon oilfield of at least 909 billion cubic feet, and potentially 7.16 million barrels of gas condensate.

If proven correct, SIPC Myanmar’s find will likely be Burma’s largest onshore gas discovery since 1988 when the military regime first opened its up the economy to foreign investment.

News of the discovery was featured prominently on the front page of the English language edition of the New Light of Myanmar.

SIPC Myanmar Petroleum Co. Ltd is a joint venture between Burma’s state owned Myanma Oil and Gas Enterprise (MOGE) and Sinopec International Exploration and Production Corporation (SIPC), an wholly-owned subsidiary of China’s Sinopec Group.

However, the discovery has not been verified by an independent third party as is a common practice in the oil and gas industry.

The Myanmar Times reported in November that Burma would get 60 percent of output from this venture, while the rest would be piped to China.

Pipeline to China expected to reap billions

China is a major investor in Burma’s gas and oil sector and is likely to be the end-user of much of its oil and gas production.

Chinese company CNOOC Ltd is building twin pipelines from the Arakan coast to Yunnan province in southwestern China.

The Group is China's largest producer of offshore crude oil and natural gas.

The pipelines are expected to enable China to receive oil from Africa and the middle east cheaply and quickly.

At present oil from African and the Middle East must be shipped through the Malacca Strait.

The pipeline is expected to come online in 2013 and will provide Burma’s with a massive revenue windfall. However, human rights activists are concerned that the money will line the pockets of military leaders and their cronies.

According to legal documents released in a battle between multinational energy companies operating in Burma and human rights group, EarthRights International (ERI), the Burmese government pocketed nearly US$5 billion from the sale of offshore gas between 1998 to 2009.

ERI alleges that these funds are kept in Singapore banks- the Overseas Chinese Banking Corporation (OCBC) and DBS Group, and not included in Burma’s national budget.

Both Singaporean banks publicly denied they are involved in hiding funds.