Firms to pipe Burma oil to China

BBC News, 29 September 2008

Burma's energy-poor neighbours are keen to buy its gas and oil reserves

Burma's military government has signed a deal with a consortium of four foreign firms to pipe natural gas into neighbouring China, state media report.

The firms - from South Korea and India - will pipe the gas from fields off Burma's north-western coast.

The deal was signed in a ceremony in Rangoon on 24 December, the New Light of Myanmar state newspaper reported.

Campaigners complain that the deals will threaten local people's human rights and enrich Burma's ruling junta.

The US and Europe maintain economic sanctions against Burma - also known as Myanmar - for its human rights record and long detention of democracy leader Aung San Suu Kyi.

But their impact has been diluted by energy investments from nearby countries, including China, India and Thailand, all hungry for its reserves of oil and gas.

30-year deal

Now Burma's state energy firm has signed a deal with South Korea's Daewoo and Korea Gas Corporation, and India's ONGC Videsh and GAIL. Daewoo holds the leading 51% stake in the deal.

The deal will see gas from Shwe reserves in waters off the Burmese state of Rakhine piped to China to supply China's National United Oil Corporation. China's Xinhua state news agency says it is a 30-year deal.

As well as Burmese ministers, the signing ceremony was attended by executives from both Korean firms, ONGC Videsh and the Chinese corporation, the New Light of Myanmar newspaper reported.

It gave few further details of the deal, but earlier reports from Beijing suggest construction will start in the new year.

Last week the campaign group EarthRights International reported that the Korean government had rejected a complaint it filed on behalf of Burmese and Korean activists.

The complaint alleged that the Korean firms involved in this deal had breached corporate responsibility guidelines on human rights and environmental protection laid down by the Paris-based Organisation for Economic Co-operation and Development (OECD).

The companies involved, and the Korean government, were "now on notice that negative social and environmental impacts from this project have begun, and are likely to continue and accelerate if this project moves forward", Matthew Smith at EarthRights International was quoted as saying.

© MMVIII

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