Will Natural Resources Abet Myanmar Repression?

Will Natural Resources Abet Myanmar Repression?

Natural gas from Myanmar, generates 20 percent of all electricity in Thailand, The gas, which will cost about $2.8 billion this year, is the largest single export for Myanmar's otherwise impoverished and cash-strapped economy.

From the perspective of Myanmar's generals, the gas purchases by Thailand are only the beginning of what promises to be a significant infusion of cash.

Myanmar will soon announce the winner of a concession in the even larger Shwe gas fields off the coast of western Myanmar. Companies from India, China and South Korea have put in bids for those contracts.

In eastern Myanmar, Thai companies are building hydropower plants and have contracts to pay the government billions of dollars for the electricity generated there.

“The natural gas drastically changed the military government's fiscal position,” said Toshihiro Kudo, director of the Southeast Asian Studies Group.

Myanmar's gas reserves are small by global standards. The oil company BP estimates that Myanmar's total reserves are 538 billion cubic meters, or 19 trillion cubic feet, far less than the reserves of nearby Malaysia or Indonesia. The billions of dollars these gas fields will produce is very valuable to the ruling generals, whose sources of financing are extremely limited because of U.S. sanctions.

“Thailand and Myanmar are increasingly integrated, increasingly dependent on each other,” Kudo said. “I don't think that Thailand is applying any very serious pressure on the military government,” he added.

“We need power,” said Suthep Chimklai, director of the system planning division at the electricity authority. “We need to balance our sources by importing more power from our neighboring countries.” Thailand also buys small amounts of electricity from Laos and Malaysia.

To keep up with its demand for electricity, Thailand is building four power plants, all of which are designed to run on natural gas. If gas supply from Myanmar were disrupted, “It would be a serious problem,” Said Suthep.

The natural gas reaches two power stations on the outskirts of Bangkok by way of a pipeline laid a decade ago by Total, the French oil company; and PTT Exploration and Production, Thailand's leading company in the field.

Will Myanmar’s natural gas resources reinforce the military’s bid for power?