Getting gas without the junta

Energy deals are no reason to look away from the junta’s thuggery

India’s energy security is often cited in justifying its hands-off approach to the anti-dictatorship movement in Myanmar. Murli Deora, the petroleum minister, found time to fly into Myanmar earlier this week—even as the protests were gathering strength—to sign a deal under which India will invest $150 million in a natural gas exploration in the country [also see Sandeep Dikshit’s report in The Hindu]. So, does securing natural gas supplies from Myanmar require India to be wary of rubbing the junta on the wrong side?

Not quite. Aruna Urs, who will be covering energy security issues in an upcoming issue of Pragati – The Indian National Interest Review tells us more about the gas business.

In 2004 ONGC Videsh Ltd (10%) and GAIL (20%) participated in gas exploration and development deal along with Daewoo (60%) and Myanmar Oil and Gas Company (10%) in the shallow blocks of A1 and A3.

In 2005, gas was discovered in the Shwe gas field at the A1 block. It was expected to have about 3.5 trillion cubic feet (TCF) of gas. In addition, a small find of 0.5 TCF was also made in Shwe Phyu field at Block A1. But even before the signing of the gas purchase deal, India began dreaming of a pipeline through Bangladesh. Bangladesh, however, demanded the moon and dragged the negotiations on for over a year. Meanwhile the junta signed an MOU for the A1 block with Petrochina. Similarly, in 2006, gas with an expected yield of about 1.5 TCF was discovered at Mya in the A3 block. The deal fell out of India’s hands for very much the same reasons.

At this time, ONGC Videsh has signed production sharing contracts to develop three deep-water blocks of AD-2, AD-3 and AD-4. It has 5 years for exploration and can take a share in production for 20 years after the find. This sounds much better than A-1 and A-3 deal where it was only exploration and development deal. Moreover AD2 and AD3 are closer to the shallow A1 and A3 blocks, which might increase the probability of a good find.

India finally dropped the Bangladesh pipe dream and then proposed four alternatives: A pipeline via North Eastern states; an undersea pipeline bypassing Bangladesh; shipping compressed natural gas (CNG) by tankers; or shipping liquified natural gas (LNG) by tankers. The land pipeline through the North East has not been received well by locals and Bangladesh. India’s sea borders in the region are not yet demarcated for any undersea pipelines. This leaves CNG or LNG as the realistic options.

But India is not alone in the great race for Myanmar’s gas. Thailand is already a large buyer, are are Japan, Malaysia and Korea, apart from China. If the regime were to change tomorrow, any democratically elected government will have to honour its commitments. They can’t run away from their neighbours who are also large customers..

It must be noted that it was the rise in consumer gas prices that triggered the current protests. If these eventually oust the junta, any future government will have to keep the gas prices artificially low to hold on to power. International donors might give aid but will surely not foot the gas bill. In this scenario, Myanmar will have to sell gas to bigger consumers like India and China in order to subside its citizens. [Aruna Urs]

The upshot of all this is that there is not much to the claim that supporting the junta is vital as far as securing gas supplies is concerned. Indeed, it can be argued that the countries that bring about a positive political change in Myanmar might be beneficiaries in future energy deals.

8 thoughts on “Getting gas without the junta

  1. Niraj

    Thanks for the link. It’s wrong to blame it on realpolitik. As I’ve argued in my posts earlier this week, pusillanimity is being dressed up as realism and pragmatism.

    If the Indian government had indeed taken a Realist line, it would be thinking about how its silence leaves the field open to China; and what this means for those in the region looking towards India to balance rising Chinese power.

  2. Nitin,

    I believe

    The upshot of all this is that there is not much to the claim that supporting the junta is vital as far as securing gas supplies is concerned.

    derives from

    It must be noted that it was the rise in consumer gas prices that triggered the current protests. If these eventually oust the junta, any future government will have to keep the gas prices artificially low to hold on to power.

  3. I came to this blog after a long time specially to see what you, Nitin, had to say about the Myanmar issue. Since I had heard before on this blog, that the only morality in foreign policy is self interest – I was presuming this blog’s unequivocal support to the Indian government for staying silent on this whole issue. However, I was pleasantly surprised – at least by this statement – Energy deals are no reason to look away from the junta’s thuggery”. There is something I can agree with. But this takes the cake – “Indeed, it can be argued that the countries that bring about a positive political change in Myanmar might be beneficiaries in future energy deals.”

    Kudos! The above statement though could also be looked at through the prism of what happened in Bangladesh. Another country we helped, hoping to reap good rewards. Hasn’t actually worked out according to plan though.

  4. What do you think if we just when in and put down the junta and handed power over to Ang Sung Su Kyi after purging the notorious generals (the top ones take a permanent holiday somewhere – I am sure their swiss accounts are heavy).

    Not being an Islamic nation, there won’t an iraq type terror reaction and if we move quickly we may be able to put away the junta fairly rapidly.

    Having said that, I think it’s not an easy thing do – mobilizing forces in the north east (beyond existing brigades) and moving south, naval blockade, and air power.

    I don’t think Myanmar will be grateful for ever if we did that. But we would be putting our stamp on the east up to Thai border and put China on notice. I hardly think China will come to rescue the junta.

    Something to think about. Pranab’s statements are bogus.

  5. Aman,

    I’m glad to be delivering surprises of the pleasant kind. To be sure, on Myanmar, The Acorn’s position has been consistent—that a Myanmar under the junta is not in India’s interests. As I wrote in an earlier post (Myanmar, Murli and Morality), doing things to earn gratitude is misleading. Even in the case of Bangladesh, I don’t think earning gratitude was ever a motivation for Indian intervention (dealing a blow to Pakistan and/or preventing the refugee influx from destabilising India were the reasons). Even so, rxpecting Bangladesh to be grateful was rather naive.

    Chandra

    While toppling the junta by force (if only a fantasy) may not lead to an Iraq type insurgency, unless it also retains the Myanmar army more or less intact, external forces will have to contend with addressing the half-dozen or so ethnic militias/insurgents out there. No one understands the dynamic well enough to be comfortably say stability can be maintained.

  6. Nitin – Appreciate your reply. I definitely understand that preventing the refugee influx and not having to deal with a war on two sides of the border was the primary consideration for India’s involvement with Bangladesh – I was merely trying to point out the fact that it won’t guarantee future energy deals, although it might, to countries that help Myanmar break the democracy barrier as I inferred from this statement – “that the countries that bring about a positive political change in Myanmar might be beneficiaries in future energy deals.”

  7. You guys are covering the issues in Myanmar much more seriously than our media.

    I would like to weigh in from my own political leanings – a left-libertarian and civil liberties perspective.

    I would like to put aside the considerations of realpolitik (I may be abusing the word, if I am, please tell me) and go to a simple point.

    To what extent can India be said to have a “hands-off” situation in Burma? As documented by various human rights organizations (and others as well – see my post for references), China and India have invested heavily in arms to the military junta – China much more heavily. How’s selling arms to a repressive regime called “hands-off” or “non-interference”?

    Indian govt. may not be making good headway with the military junta, losing out to Chinese govt. (which has no pretensions of democracy and/or civil liberties). But that hardly qualifies as “non-interference”. In fact, our govt. is trying very hard to intervene and has been doing for a long time.

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