West wary of Burma investment

Western companies are still thinking twice about investing in Burma despite recent political reforms, leaving the way clear to Indian, Thai and Malaysian companies to invest in the South East Asian nation.

Andrew Hobbs 24 November 2011 09:02 GMT

Burma, also known as Myanmar, closed its biggest oil and gas exploration tender in years in August, a few months after it cautiously started political reforms, and the government is now processing the bids, Reuters reported.

Industry sources in Burma told Reuters the tender had attracted about 50 bids, with regional companies said to be the main contenders.

So far only Thailand’s PTT Exploration and India’s ONGC Videsh have publicly expressed interest in this tender, with ONGC saying it is evaluating data, Reuters reported.

US companies are barred from new investments in Myanmar under government-ordered sanctions and Chinese oil companies were lukewarm to the bidding for 18 onshore oil and gas prospects, due to concerns over the blocks’ prospects, Reuters reported.

Coupled with this, bilateral ties between Burma and China have been strained since September, after Rangoon shelved a China-backed dam in the north of the country.

CNOOC said it had not put in a bid, while no comment was received from Sinopec or China National Petroleum Corporation, Reuters reported.

Facts Global Energy consultant HS Yen said Burma could have received only one expression of interest from Europe.

“They probably have attracted as much as 50 bids, but each field may have been counted as a separate bid, so the number of individual companies bidding are very likely much lower than 50,” Yen said.

“I certainly don’t see a major company that isn’t already present in the country venturing into Myanmar given the risks of doing business there and the small reserves size.”

Total, which leads the $1 billion Yadana gas project in Burmese waters in the Andaman Sea, had not taken part in the tender, a company spokeswoman said.

Total chief executive Christophe de Margerie last month said his company would like to play a bigger role in Burma but first wanted to see concrete signs of increased democratisation.

“We decided that … it was important to be in Myanmar but that we will not invest until things are getting better … I do hope that will happen,” he said.

Source

Posted on November 24, 2011, in China, Myanmar (Burma), Natural Gas, Oil, Southeast Asia and tagged , , , , , , , , , . Bookmark the permalink. Comments Off on West wary of Burma investment.

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