Andrew Mitchell, the first cabinet-level EU minister to visit Burma, has warned foreign companies not to “pre-empt” a cessation of EU sanctions on Burma in light of rumours that Royal Dutch Shell will enter the country’s lucrative extractive sector.
The UK’s international development secretary left Burma yesterday evening after his first visit to the country, in which he saw “clear and immutable changes”. Western nations, he said, would be “big-hearted and generous” to the Burmese leadership if it continues on its current trajectory, notably releasing all political prisoners.
But he reserved stern words for the Anglo-Dutch energy giant, whom reports suggest is looking to partner Thailand’s state-owned PTT Exploration in attempting to develop an offshore gas block off Burma’s southern coast.
Shell already works with PTTE in gas and oil fields in New Zealand, and Thailand’s Nation newspaper said the two companies were “in talks” regarding “interesting countries for Shell [which] also includes Burma”, whose energy reserves are drawing increasing attraction from regional neighbours and the US and EU.
The M-11 block in question lies just south of the Irrawaddy delta in the Gulf of Martaban, close to the M-9 block which is also owned by PTTE. Plans are being made to connect these to Thailand via the Zawtika pipeline, which is currently under construction.
Shell is seen as a world leader in deep sea exploration and production (E&P), a capability that PTTE requires to develop M-11, which they own outright. This could see Shell buy a stake in the block.
The oil giant is the fifth largest company on earth and operational in 90 countries, but would become the first major western energy multinational to re-enter Burma since sanctions were enacted in the 1990s. US oil company Chevron and France’s Total have maintained a controversial presence in the country despite the economic blockade.
With several western companies pressing to enter Burma, trade delegations from EU states including Austria and Sweden have over the past year discreetly made exploratory trips.
Mitchell said however that the country’s oil and gas sector was specifically designated as off-limits by EU sanctions, along with timber, gems, jade and arms. The EU carried sanctions over for another year in April but did ease travel restrictions on some senior members of the government, such as foreign Minister Wunna Maung Lwin.
As well as meetings with President Thein Sein and parliamentary speaker Shwe Mann, Mitchell also held talks with Aung San Suu Kyi yesterday at one of the NLD’s 18 free schools for deprived children, an experience the Conservative party minister described as “emotional”.
The UK government has been given much greater access to ministers in Naypyidaw, say diplomats, while the Conservative government of David Cameron has promised to instruct ambassadors to push for British business in their respective countries.
Controversy has surrounded the UK’s foreign trade with questionable regimes however, with British-made weapons discovered to have been used in the brutal suppression of popular protests in Bahrain this year.
Andrew Mitchell is mistaken. There are currently no EU regulatory restrictions on Shell investing in Burma. Total has undertaken not to increase its present investments, but this is a result of political persuasion by President Sarkozy. Shell could already be discounting the reputational risk. However, they are open to dissuasion by the British Government and what Andrew Mitchell has said will give them pause for thought. Shell need, after all, to maintain a good relationship with the British Government in respect of their world-wide interests. What Shell have done though is to set down a marker for the future in case there are rapid changes in the investment environment. Flying a kite.
The meaningful Democracy,th release of political prisioners of conscience and the amicable solution of ethnics are first piority.
Then ,you can strat foriegn investments.
The natural resources are belong to the people and it’s not a parental property of some particular person like Bo Than Shwe.
With or without any reform or lovey-dovey things, the last thing Burma need is another one to come and exploit the natural resources taking advantage of poor law enforcement a,d non-existent rules and regulation where the corrupted government is always ready to steal public property to nearest bidder.
In spite of enthusiastic endorsement by the NLD of the current fake government, Burmese public (the real ones) have very little faith in it and the degree of social tension due to dire living circumstances stays unabated.
One has to remember apart from a lot of noices, the lives of struggling majority and the killed and the raped has NOT changed at all.
With Shell’s record in Nigeria Shell’s involvement in the oil sector is the last thing Burma needs!