By WILLIAM BOOT | BANGKOK — South Korean industrial giant Daewoo International and an American company are behind the gas and oil probes in Bay of Bengal waters that triggered a military confrontation between Burma and Bangladesh.
 The Block A-1 gas field off the northwestern coast of Burma. Daewoo International and the Korea Gas Corporation have a 70 percent stake in three Burmese offshore gas wells including A-1. (Photo: chosun.com) |
A dispute over the offshore territory, which both countries claim, has never been resolved by international maritime mediation.
The area is adjacent to the Shwe field inside Burmese waters off the Arakan coast, which has proven gas reserves of at least 6 trillion cubic feet (around 200 billion cubic meters).
Initial reports said Burmese explorers were at work in the disputed seas.
However, industry analysts in Bangkok say Burma’s government-controlled Myanmar Oil and Gas Enterprise (MOGE)—which overseas all Burmese exploration—does not have the technical equipment or know-how to set up offshore exploratory drillings.
But in September there was a brief announcement by Daewoo on the South Korean stock exchange that it planned to conduct new exploratory drilling for oil and gas in Burmese coastal waters.
Daewoo, a secretive company which discloses only minimal legally required company information, said it would shortly start a five-month multimillion dollar drilling program at an undisclosed location.
It hired the US firm Transocean, the world’s largest offshore drilling contractor, whose services are costing Daewoo over US $400,000 per day.
“Offshore drilling is an expensive and specialized activity, as shown by a big firm like Daewoo hiring an outside specialist,” The Irrawaddy was told this week by Bangkok energy industries analyst-consultant Sar Watana. “I doubt if it’s the sort of thing the MOGE could do alone.”
Daewoo is the major concessionaire in two blocks of the Shwe offshore gas field, which is not far from the disputed sea territory. There has been no evidence that Daewoo has any exploration rights in Burma’s other main offshore gas fields along east coast areas of the Andaman Sea.
News agency reports Thursday also named Daewoo as the drilling contractor in the disputed territory.
The Burmese government said late Thursday it rejected Bangladesh’s claim on the territory and demands for a halt to exploration, which a statement broadcast on state radio called “unlawful and wrong.”
The statement said exploration will continue—setting the scene for possibly more military confrontation, and souring prospects for a diplomatic outcome. The two sides are due to meet to discuss the issue in Dhaka later this month, according to Bangladesh media reports.
Bangladesh has appealed to the Burmese junta’s chief ally, China, for help in resolving the issue.
China on Thursday said it would seek to assist in the dispute in what the official news agency Xinhua termed “an appropriate manner.”
But observers point out that China is hardly a neutral intermediary.
Through pressure on the Burma junta, Beijing elbowed India out of negotiations to become the sole buyer of the Shwe gas, and Daewoo is engaged in plans to construct a huge pipeline to ship the gas into China’s southwestern province of Yunnan.
All three countries are desperately short of energy. Dhaka unsuccessfully approached the Burmese authorities recently with a request to buy gas.
Daewoo was last week named in a complaint to the Organization for Economic Cooperation and Development (OECD) for tacitly condoning human rights abuses in Burma in connection with its Shwe gas development.
The allegation, by the US-based nongovernmental organization EarthRights International, said Daewoo had failed to comply with the corporate responsibility codes of the OECD, to which South Korea is a signatory.
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