|Burma: Foreign Oil and Gas Investors Shore Up Junta
|Foreign Investments in Burma
Foreign companies are lining up to partner with Burma’s military junta and tap into the country’s lucrative resources, particularly oil and gas fields. This foreign investment provides a crucial source of support to the junta, allowing it to ignore demands that it return Burma to civilian rule and end human rights abuses.
The billions of dollars generated by these projects, which involve at least 27 companies from 13 countries, help to fund the military without bringing benefits to ordinary people.
Outside investors in Burma’s oil and gas industry include companies from:
Many of the foreign companies involved are wholly or partially owned by governments. That is the case for China, India, Japan, Malaysia, Russia, South Korea, and Thailand.
- British Virgin Islands
- Russian Federation
- South Korea
- United States
Who’s drilling for oil and gas in Burma?
We have compiled detailed information on foreign investment in Burma’s oil and gas fields. Our review of publicly available sources shows that foreign investors have a stake in more than 30 different oil and gas fields in Burma. We have created maps to show where these fields are located and which companies are invested where. We profile each of these projects and the individual companies involved.
We also collected public statements about Burma by some of these companies, including Chevron, Daewoo International, Nippon Oil and Total.
We also identified government-held and abandoned oilfields.
Download the complete set of materials:
Onshore Drilling: Map and Description
Offshore Drilling: Map and Description
Company Profiles and select Company Statements about Burma
Government-Held and Abandoned Blocks
How does it work?
Foreign companies sign contracts with the state-run Myanmar Oil and Gas Enterprise (MOGE). Under these contracts, the companies get permission to drill for oil and gas in a designated geographic area known as a block. These blocks may be on land (“onshore”) or in Burma’s coastal waters (“offshore”), and each one is identified by a name or abbreviation.
The “production-sharing contracts” between MOGE and the companies specify the fees and taxes the companies have to pay to the government of Burma. They also give the government the right to become a partner in the project after a period of time, if it looks promising. In other words, foreign companies spend money up front to explore for and produce petroleum, but Burma’s military gets a cut of the sale of oil and gas produced from these fields once initial costs are recovered. The money flowing into the coffers of Burma’s generals is already staggering and will only increase as more gas is discovered and brought into production.
How much money is at stake?
Burma’s military government relies heavily on the oil and gas sector to sustain itself in power. It earned approximately $2.16 billion in 2006 from sales of natural gas, which accounted for half of Burma’s exports and represents its single largest source of foreign exchange.
Petroleum proceeds are set to increase as a result of ongoing investment by foreign companies actively exploring for more oil and gas.
Contracts for a majority of the 30 oil and gas project were signed after mid-2004. Ten of the deals, covering 14 blocks, were penned between September 2006 and September 2007. This trend signals the government’s ongoing move to expand foreign investment in this sector to keep itself afloat.
What should the world do?
The United Nations Security Council should prohibit any new investment in Burma’s oil and gas fields. It also should block company payments that help sustain Burma’s brutal military rule.
Until then, all countries that have economic ties to Burma should act to suspend any further development of Burma’s oil and gas sector. They also should impose targeted financial sanctions on companies owned and controlled by the Burmese military, or whose revenues substantially benefit the military. Specifically, they should freeze bank accounts belonging to military-controlled companies and impose additional sanctions to block their financial transactions. They also should require companies headquartered in their jurisdictions that have business ties to Burma to publicly and fully disclose all payments made to the Burmese military, directly or through the entities it controls, and where those payments are made.
Robust banking sanctions are needed as the centerpiece of an effort to cut off funds that are used to finance repression by Burma’s military. Banking sanctions complement targeted sanctions on investment and trade because they have the potential to severely constrain the junta’s ability to access income, no matter the origin of the payments. If applied effectively by key financial powers — notably the United States and European Union — strict financial sanctions could block the junta from using much of the international financial system.
* Note: This data was prepared based on a review of publicly available sources. Where possible, we have updated it using information available as of the date of publication. We invite comments, corrections, and updates. Please submit those to email@example.com.