Shwe+Gas+Bulletin,+Dec+Issue 2010

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Published by the Arakan Oil Watch, a core member of the Shwe Gas Movement

Bulletin

TheTheTheTheThe

Volume 3, Issue 11 December 2010

Largest

Investment:

Dawei Project

StartsConstruction

in 2011

Nov 18, 2010 (SGB)

Continue to page 7-

Thailands largest construction

company, Italian-Thai Developmentwill start construction of the Dawei

Development project in Burma in

January next year, according to media

reports.

Construction of an eight-lane highway,

part of the project linking the Dawei

port to central Thailands city

Kanchanaburi is already underway.

Italian-Thai Development won a

contract from the Burmese

government in 2008 to survey and

build a road linking Dawei to

Kanchanaburi.

The second phase of the Dawei

Development project will include the

construction of a seaport, which will

be able to handle up to 25 vessels of

20.000 to 50.000 tonnes at a time.

Other sources say the port will be

capable of handling vessels as large

as 300,000 tonnes. The port will

Burmas pro-democracy leader and Nobel Peace laureate Aung San Suu

Kyi was released from her house arrest on Nov 13, 2010. Military

controlled elections were held for the first time in two decades on Nov

7th and the fully backed Union Solidarity and Development Party claimed

over 75% seat victory in the elections. NLD boyccoted the elections andwas condemned by the opposition movement and many countries around

the world.

There should be transparency and accountabilityto make sure that, whatever deals there are, that they

are to be to the profit, the benefit of the people,Aung San Suu Kyi stressed after her release

regarding foreign investment in Burma


2/8


The Shwe Gas Bulletin

Page 2

Thailands Dawei Investment Project: Protection of

Human Rights and Environment NeededOn November 2nd Thailand signed a contract worth

US$ 8 billion the with Burmese military regime for the

Dawei Development Project, making history as the

largest investment in Burma, a nation run by a group of

military leaders infamous as state terrorists for killing

and torturing its civilians and activists including monks

who peacefully marched in 2007 for the freedom and

democracy.

Many people in Thailand believe that the project will

benefit both Thailand and Burma. The Dawei Port

Project will start construction in January 2011, which

will help Thailand to avoid the Strait of Malacca-known

for its piracy- for its energy import and will save

shipping time. By shifting Thailands long awaited

environmentally concerned industrial zone to Dawei,

Thailand will benefit from cheap labor cost and will

avoid environmental damages into Thai air and soil from

heavy industries and the proposed chemical complex.

For Burma, the project could provide jobs for thousands

of Burmese but one of the worlds most corrupt military

regimes will be the one who will benefit the most from

this multi billion project. According to the International

Herald Tribune, the project includes a profit-sharingagreement with the Burmese military regime, but detailed

information has not been disclosed.

Revenue flowing to the regime could mean military

power expansion to buy more military weapons and

equipment. Revenue will be used for Burmas military

leader Than Shwes nuclear weapons development

rather than for the development of the country.

Burmas desperate military regime is willing to sacrifice

Burmas clean air and soil just for the hot money and

Thai companies rather harm peoples livelihoods and

the environment in Burma rather than creating jobsbecause of the lacking human rights and environmental

protection laws in Burma.

Due to the opposition from local residents about the

environmental concerns, the expansion of the industrial

complex at Map Ta Phut, Thailands largest

petrochemical facility in the south is no longer possible.

Seventy-six projects on the estate remain closed, after

a court ruling regarding residents complaints about

leukemia and cancer rates in the area.

Thai Prime Minister Abhisit Vejjajiva recently publicly

stressed Some industries are not suitable to be locatedin Thailand. Explaining the project to viewers of his

weekly television address he said: This is why they

decided to set up there, referring to Dawei.

For the development of projects in Thailand, companies

are required to do an environmental impact assessment

and conduct a public hearing. In Burma, however,

human rights abuses and environmental damages are

common in the areas of so called developments projects

as companies implement the projects without conducting

Human Right Impact Assessments (HIA), Environment

Impact Assessments (EIA) and Social Impact Assessments

(SIA).Foreign companies fail to take their responsibility

to practice internationals standards for the protection

of community rights and the environment.

Local people are never consulted or informed regarding

projects by the companies or the Burmese military

regime. Even though one of the largest industrial estates

in Dawei is currently being built, local residents are

not informed nor consulted about the project. Many

people in the project area are still unaware of the risks

of the project to their livelihoods and the environment

from the heavy industry estate that could ruin their lives.

In Burma it is impossible for local people, who are

already living in fear under oppressive military rule, to

complain to either the Government or foreign companies

about relocation or confiscation of land with or withoutcompensation.

As has been learned from past cases in several

development projects in Burma, local authorities have

forced villages to sign a written agreement for the

confiscation of their land or relocation. If a person

complains or refuses to sign the agreement, he or she

will be threatened to be arrested immediately, put in jail

or tortured.

As Thailand is investing in Burmas numerous

development projects such as oil and gas exploration,

gas pipelines and hydropower dams, Thailand mustrealize that it is cooperating with one of the worst human

rights abusers in the world and that Thailand is

complicit in human rights abuses and environmental

damages in Burma.

While investing in Burma, Thai companies should adhere

to international standards or at least home country

standards for the protection of community rights and

the environment. Thailand must also ensure

transparency and accountability for its payments for

gas and other investments to the Burmese military

regime. Due to the lack of protection of human rightsand the environment and transparency and

accountability, Thailands investments in Burma are not

more than sucking its neighbors blood.


3/8


Volume 3, Issue 11

Page 3

AOW

Daewoo

Construction of China-Burma Oil and Gas Pipeline

Started at Both Sides

Mid 2010 China started the construction of the China-

Burma oil and gas pipeline from both Burmese and

Chinese sides. CNPC, Chinas largest oil firm and

parent company of PetroChina, will build and operate

the pipeline. The construction is due to finish in 2013.

The oil and gas pipelines will start from Arakan states

port city of Kyauk Phyu and it will enter to Chinas

Yunnans border city of Ruili by passing through central

Burma and Shan State.

The 2,380-km long oil pipeline will end in Kunming City,

the capital of Yunnan. It is expected to carry 22 million

tonnes of crude oil per annum to China from the Middle

East and Africa.

The natural gas pipeline will be even longer, running from

Kunming into Guizhou Province and the Guangxi Zhuang

Autonomous Region in south China and will have a total

length of 2,806 km. It is expected to transport 12 billion

cubic meters of Burmas Shwe gas to China every year.

CNPC is also building a 200,000 bpd refinery in the city

of Anning that is designed to process crude oil delivered

via Burma. It will be completed within three years.

China is planning to build an economic zone in the port

city of Kyauk Phyu and a railroad connecting Kyauk

Phyu to Ruili. The project is scheduled to finish in fiveyears. (Oct 2010. SGB )

China has started oil and gas pipeline con-

struction in Centerl Burma since June 3, 2010.

Rights abuses cnoncerned due to the absent of

protection law and military involvement in the

project. (photo eleven media group)

Constructors work at the project as the China-

Myanmar oil and gas pipelines formally started

Chinese section construction in Anning of Southwest

Chinas Yunnan province, on Sept. 10, 2010.

(Xinhua/Chen Haining)

A railroad along with the pipeline and economic zone under plan


4/8



Page 4

Reuter (Nov 24, 2010)

Aung San Suu Kyi, the Myanmarese pro-democracy

leader who was released from seven years of continuous

house detention on Nov 13, used her first interview with

an Indian media organisation to criticise the worlds

largest democracy for its foreign policy towards the

military junta-ruled nation.

I am saddened with India. I would like to have thought

that India would be standing behind [the pro-democracy

movement]. That it would have followed in the traditionof Mahatma Gandhi and Jawaharlal Nehru, Suu Kyi

told the Indian Express on Wednesday.

I do not oppose relations with the Generals but I hope

that the Indian government would talk to us as well. I

would like to see talks begin immediately. I would like to

see close and friendly relations, like those that have not

been seen recently.

India has developed close ties with Myanmar over the

past two decades, largely in reaction to Chinas strong

presence in the country and New Delhis fears that large

Chinese investments in the wider region are part of a

plan to encircle India in a string of pearls.

Suu Kyis comments follow similar remarks from U.S.

President Barack Obama, who chastened India for

shying away from violations of human rights during his

landmark speech to parliament in New Delhi last month.

When peaceful democratic movements are suppressed

as in Burma then the democracies of the world

cannot remain silent, Obama told the assembled

lawmakers.

Having initially supported Nobel Laureate Suu KyisNational League for Democracy, New Delhi shifted its

strategy in the early 1990s to court the military regime.

Since then, it has funded the development of a port on

the countrys northwestern coast, built roads and

railways there, and has supplied arms to Yangon as it

competes with Beijing for Myanmars oil and gas

resources. India, which shares a 1,645-km (1,000-mile)

border with Myanmar, is the countrys fourth largest

trading partner.

India has also refused to heed calls from otherinternational democratic nations to exert pressure on the

military regime. In 2009, India refused to support

International Labour Organisation criticisms of forced

labour in Myanmar, while in 2007, then-Foreign Minister

Pranab Mukherjee appeared to ignore widespread

protests and the tough military crackdown in the country

by repeating word-for-word the same speech on the

need for closer ties he had delivered earlier that year.

Human rights organisations have said India has

mortgaged its voice on political and human rights

issues for economic gain, while this month former

Minister of State for External Affairs Shashi Tharoor

wrote that from standing up for democracy, India had

graduated to aiding and abetting the military regime.

It is an approach that Suu Kyi, who graduated from

New Delhis Lady Shri Ram College and lived in Indiaprior to her return to Myanmar in 1988, hopes to shift

away from pure economics:

I would like India to remember that the two countries

have been through thick and thin together. We have

fought together against colonialism. It is now time to

maintain steady in that direction and encourage a

valuable friendship, she said.

But with Chinese investment in the country soaring to

over $8 billion this fiscal year and New Delhi anxious of

its rivals expanding influence in the Indian Ocean region,will India risk its ties with the junta in standing up for

democracy?

Suu Kyi Underlines Indias

strategic approach to

Myanmar

Illustration: Ramachandra Babu/Gulf News


5/8


Volume 3, Issue 11

Page 5

ABC news (Nov 9, 2010 )

The Greens say Australias sanctions against Burma are

not tough enough and there should be a full trade embargo.

Violence has broken out in Burma, particularly along the

border with Thailand, in the wake of the weekends landmark

elections - the countrys first in 20 years, which many

countries have described as a fraud.

The Greens say there is still about $50 million of trade with

Burma, particularly in oil and gas, and forestry investment

which should be restricted.

Senator Scott Ludlam says Australias sanctions target

Burmas ruling military regime but they are not adequate.

The regime is deliberately trying to muddy the waters now,

that a whole host of senior generals resigned and stood in

their so-called elections, he said.

Its going to become more difficult to determine who is

actually a member of the military clique and who is not.

The most important thing we can do now, particularly with

the upsurge of violence on the border with Thailand, is to

prevent revenues from flowing into that country.

There is about $50 million a year of two-way trade with

Burma, and you cant get into the oil and gas business or

the forestry business in Burma without doing a deal with

the military regime.

I think its completely unacceptable in the light of the

election and the subsequent violence that Australian

investors should still be able to trade with Burma.

We need a full embargo now.

The Australian

Greens Demand

Burma Trade EmbaroBloomberg (October 05, 2010)

By Makiko Kitamura

A Toyota Motor Corp. affiliate has sold its share of a

Myanmar venture, majority-owned by Suzuki Motor

Corp., that made Toyota a target of criticism for its ties to

the countrys military junta.

Toyota Tsusho Corp. sold its stake in June in the venture,

which builds cars and motorcycles with Myanmars

government, because of the countrys poor human-rights

record, Reuters reported earlier today. The Nagoya,

Japan-based trading company is about 22 percent owned

by Toyota Motor, the worlds biggest carmaker.

Katsutoshi Yokoi, a Toyota Tsusho spokesman in Tokyo,

confirmed the stake sale, declining to specify the timing,

reason, or stake size, citing an agreement with parties

involved.

The venture, known as Myanmar Suzuki Motor, produced12,000 vehicles in 2006, the report said, citing a researcher

at investment fund Domini Social Investments LLC. Toyota

Motors ties to the venture drew criticism from human-

rights groups including London-based Burma Campaign

UK, which included the carmaker and Suzuki in its dirty

list of companies that do business with Myanmars regime.

Toyota Motor halted exports to Iran in June after the U.S.

and the United Nations imposed sanctions in response to

the Middle Eastern countrys nuclear program.

Suzuki raised its stake in the Myanmar venture to 70

percent from 60 percent as early as this June, said Ei

Mochizuki, a spokesman at the Hamamatsu, Japan-based

carmaker. Suzuki has no plan to exit the venture, which

began production in 1999, Mochizuki said.

Toyota Affiliate Exits

Suzuki Venture in

Myanmar

RESOURCES FOR THE PEOPLE


6/8



Page 6

AFP

ILO targets Myanmars military

over forced labour

GENEVA: International labour

experts warned on Sunday that Myanmars military is still

resorting to forced labour despite signs of progress withcivilian local authorities.

An International Labour Organisation (ILO) committee

backed calls for the release of six people who have been

imprisoned for up to 18 months after they sought the help

of the agencys office in the country, and renewed criticism

of Myanmars military, ILO officials said.

There is an indication that the use of forced labour

systematically by civilian authorities in some areas is

reducing, Steve Marshall, liaison officer for the UN labouragency in Myanmar, told AFP.

The other side is there is no evidence of any change in

attitude to the use of forced labour by the military, he

added.

The 183-nation ILOs committee on standards has

assessed Myanmars record with forced labour annually

since an inquiry concluded that the practice was widespread

and systematic there.

It met on Saturday but its conclusions were only due to be

published today (Monday).

In 2007, Myanmars military junta bowed to pressure from

the UN labour agency and allowed an official based in the

capital, Yangon, to deal with complaints from victims.

Marshall, who took part in the meeting in Geneva, indicated

that the committee upheld his assessments and reiterated

calls for changes to parts of Myanmars constitution and

laws that could condone forced labour.

It also noted that official efforts in the country to raise

awareness to help prevent the practice were gaining pace.

ILO Targets Burmas

Military over Forced

Labour

AFP (Nov 23, 2010)

November 18th, 2010 | Xinhua

Foreign companies are working in 42 gas exploration

blocks in Myanmars oil and gas fields under respective

contracts, the Biweekly Eleven News reported Thursday.

The 42 blocks include 12 in the inland and 30 in the offshore

areas. The 30 offshore blocks further include 10 deep-

sea blocks.

There are 31 inland and 5 offshore oil and gas fields inMyanmar.

Starting 1998, Myanmar has been able to export gas to

Thailand and in the next few years, the export will be

expanded to China, the biweekly said.

Oil and gas stands the sector with most foreign investment.

In 2009-10, Myanmar produced nearly 7 million barrels

of crude oil and 400 billion cubic-feet (11.32 billion cubic-

meters) of gas, according to official statistics.Meanwhile, to boost oil and gas output from the inland

blocks, Myanmar imported four huge seep-soil drilling

machines from China for use in newly-explored

Thagyitaung, Kyaukhwet, Maubin and Pyay oil and gas

fields, the report added.

According to the geological condition, Myanmar has 14

geological valleys in the onshore regions, among which the

state- run Myanmar Oil and Gas Enterprise has conducted

surveys in the central region, Pay and Delta regions.

It was reported that there remains many more promising

regions for exploitation of oil and gas in the country.

In the latest development, oil and natural gas are also being

exploited at new blocks such as MD-4 in the west of Dawei,

Tanintharyi division, MD-5 in the west of Palaw and MD-

6 on the west of Myeik which were found in Mottama

offshore deep sea region.

Although annual foreign investment in the oil and gas sector

stood only 278.6 million U.S. dollars in 2009-10, it was

raised sharply to 9.81 billion dollars merely in the first five

months (April-August) of 2010-11, a latest statistics show.

Foreign Companies

work in dozens of gas

blocks in Myanmar


7/8


Volume 3, Issue 11

Page 7

provide a shortcut avoiding

the Strait of Malacca forcargo between Europe and

the Middle East and Asia.

According to the contract

signed on November 2

between the Burmese

military regime and Italian-

Thai Development, the

Dawei Development

Project consists of three

phases: the construction ofa transportation corridor to

Thailand as well as roads

linking the public utilities and

facilities in the industrial

zone; the port; and the

industrial estate. The first

stage is expected to take

five years and the final two

stages are expected to take

another five years with total

project completion

expected in 2020.

Italian-Thai Development

has said that the first phase

of the project will cost $8 billion with financing already

secured from an unnamed private bank. The Thai

government is also contributing $60 million towards the

construction of the highway. The highway from the port

will lead 130 kilometers to the Thai border and then on to

Kanchanaburi. A rail line will be built parallel to the new

road, according to Asia Times online report.The report said the third phase of the project is the

construction of a 40,500-hectare industrial estate. The

original plan for the location of the industrial estate was in

Map Ta Phut in Southern Thailand. However, the project

plan did not reach agreement with the Southern residents

who opposed to the project for its negative social en

environmental impact.

Some industries are not suitable to be located in Thailand,

said Abhisit Vejjajiva, the Thai prime minister in his weekly

television address explaining the project to its viewers. Thisis why they decided to set up there, he said, referring to

Dawei.

Once completed, the estate will have seven zones: port

and heavy industry complex, petroleum and chemical

complex, an upstream and downstream petrochemical

complex, medium industry, light industry, and a town with

homes, public facilities and a commercial complex.

Several Thai companies are involved as sub-contractors

or have expressed interest in becoming involved in theproject. Amata Corporation has been named as the

developer of the industrial estate for which, together with

Italian-Thai Development, the company has carried out a

two-year feasibility study. A subsidiary of state-owned PTT

Chemical, Thai Tank Terminal, has also expressed interested

in operating a storage terminal near the port. Siam Cement

Group, Thailands third-largest company by market value,

is also interested in setting up a cement plant at the port.

Bangkok Bank is reportedly interested in offering loans

for the project.the entire project could be worth more than US$58 billion,

making it Burmas largest investment project ever.

The project envisions that the new trans-border corridors will

promote regional integration. Through the port and transport links,

an average of 10 days will be cut from the journey of goods bound

for Thailand, China, Vietnam and Laos as cargo will no longer be

need to pass through the Strait of Malacca. Photo: Dawei

Development Project handout

Continued from page 1 -

Largest Investment: Dawei Project Starts Construction in 2011


8/8



Russia Joins Sanction Hit Tay Zas Htoo

Group to Explore oil and gas in BurmaNov 9, 2010 (SGB)

Burmas Htoo Group of Companies and Russias NobleOil will jointly explore oil and gas in Shwe U-ru block (B-

2) in Homeli Townhsip in Sagaing region, according to

Rangoon based Weekly Eleven News.

Tay Za, a close associate of Burmas

dictator Than Shwe is Chief executive

officer and managing director of Htoo

Group of Companies (HGC). Tay Za

consolidated his relationship with the

junta by creating Myanmar Avia Export,

Burmas sole representative of Russias

Export Military Industrial Group,

(MAPO), and of the Russian helicopter

company Rostvertol. Tay Za was

instrumental in the juntas purchase of

ten MiG-29 fighter aircraft for US$130

million.

HGC is the parent company of Air Bagan, a privately held

Burmese airline company. The company has several

subsidiaries. Htoo Wood Products Company Ltd. is

engaged in logging and export of timber (especially teak).

Htoo Trading Company, is engaged in construction,

property development, agriculture, transportation, shipping,

mining, hotels and tourism operations. Htoo Trading

Company and Asia World Company were the first two

construction companies granted contracts to build the new

national capital in Naypyidaw. Htoo Trading Company is

Burmas top private exporter and fifth largest overall, withgross revenues of $65.1 million. High ranking military

generals and family members holds shares in the HGC and

its subsidiaries.

Since 2006, other three Russian oil

companies have been engaged in oil and

gas exploration in Burma under

respective contracts. The first Russian

company, which is JSC Zarubezhneft

Iteraaws along with the Sun Group ofIndia, has been exploring oil and gas at

block M-8 lying in the Mottama offshore

area under a production sharing contract

with the Myanmar Oil and Gas

Enterprise (MOGE) signed in

September 2006.

The latter two Russian companies Silver Wave Sputnik

Petroleum Pte Ltd and the Silver Wave Energy Pte Ltd of

Kalmykia have been drilling Zeebyutaung test well-1 at

the inland block B-2 in Pinlebu township of northwestern

Sagaing region under another similar contract reached in

March 2007.

Seven foreign companies are operating onshore, including

Essar Oil Ltd, Focus Energy Ltd, MPRL Exploration and

Production Private Ltd, Goldpetrol, CNOOC, Sinopec

Oil Company and Chinerry Assests, according to statistics.

Oil drilling in central Burma

Arakan Oil Watch (AOW), founded in 2006, is an independent

non-governmental organization that struggle for the protection

of human rights and the environment and equity and justice for

the communities from extractive industries in Arakan and Burma.

AOW educates affected communities on these issues, develops and

promotes oil and gas revenue transparency standards, and conducts

international advocacy. AOW is an active core member of the Shwe

Gas Movement and Oilwatch SouthEast Asia. Each month AOW

publishes The Shwe Gas Bulletin in English and Burmese

languages, a newsletter covering the latest developments in

Burmas oil and natural gas industry.

Shwe Gas Bulletin Team

Jockai (Editor)

Tulika

A.K.Soe

R.N.Soe

Than Naing

Layout & Designed by

Herman

Arakan Oil Watch

Contact:[email protected]

+66 (0) 53329366 w w w . a r a k a n o i l w a t c h . o r g

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