Stories which appeared like fables about the vast abundance of rubies, oil and timber are quite famous about Myanmar. But these are not mere fictions but ground realities. According to data, Myanmar has 20 trillion cubic feet(tcf) of natural gas reserves. That’s worth around $106 billion at today’s natural gas prices. The great news is that most of these reserves are still in place as Myanmar has only exported its gas for the past 15 years. But that could be just the beginning. Since the 1970s explorers have only drilled a total of 19 offshore exploration wells. This is an almost completely unexplored zone. Many experts also suggest that in addition to the current 20 tcf of reserves, there could be another 80 tcf of undiscovered natural gas worth around $424 billion. Add this to Myanmar’s other potential reserves and the slow freeing up of the economy, and hence it’s no wonder that entrepreneurs from across the globe specially Indians and Chinese are willing to readily invest in this oil.
Myanmar has been ruled by a military dominated government since 1962. The military rule has had a devastating impact on Myanmar’s economy. Due to its isolation from international trade, it has bypassed globalisation and missed out on many of the benefits of improved technology. In fact, a common saying about Myanmar is that once you land at the airport, you have to wind your watch back by decades. But things are changing. Recent once-in-a-lifetime changes to the military constitution means that ground breaking reforms could be on the way.
This would allow explorers to exploit these undiscovered oil and gas fields and lead to a boom for Myanmar’s depressed economy. The possibility is so big that the growth potential for Myanmar today could be on a par with China’s economic growth from 1979 through to today. It’s that big. And with the present day technology, Myanmar’s growth should happen much quicker than China’s amazing growth.
These positive trends for Myanmar are not just restricted to its growth but have innumerable optimistic gifts for its close neighbour ‘India’. Currently India is facing an acute shortage of power. Most of the towns face acute shortage of electricity. Many people in villages are yet to see a ‘lighted bulb’. On an overall level it has hampered the industrialization and economic growth of the nation. Then why does not India purchase the entire abundant exportable oil from Myanmar ?
Everything in international trade is not that simple. A good diplomacy between the nations is an essential ingredient for an efficient business to occur. Although the relations have improved a lot but other problems too come into the trade. Wedged between the energy-hungry China and India, Myanmar needs more investment to explore its gas potential.
The resources are enough but what Myanmar lacks is the ‘capital to exploit it out’. According to the forecast by McKinsey Global Institute, energy and industries such as agriculture need a combined $320 billion through 2030 to help the crippling economy achieve 8 percent annual growth. During the Military regime of Myanmar, India had drifted a bit away from Myanmar due to its policy of non-interference in Burmese politics and faith in democracy. This had boosted the China-Myanmar trade, the disadvantage of which can well be witnessed on the current Indian entrepreneurs operating in Myanmar.
But the consistent effort of Indian companies in Myanmar has started giving out wonderful results. Indian companies like Reliance, OIL, ONGC have become quite popular on Burmese soil. The 3 state-run Indian companies- ONGC Videsh Ltd., Indian Oil Corp. and GAIL(India) Ltd have kept a constant watch on the oil and gas blocks in Myanmar. Oil India (OIL), the second largest state explorer, signed contract for two offshore oil and gas blocks it had bagged in Myanmar. Reliance Industries in May 2014 also won two offshore exploration blocks in Myanmar. After the auction results, the company announced “RIL’s participation is in line with its strategy of expanding its international asset base by investing in regimes having attractive internationally competitive terms on offer. The company thus hopes to leverage its organizational capabilities and expertise to create value for the E&P (exploration and production) segment.”
These all are a part of the move in the India’s plan to acquire oil and gas assets overseas to meet the energy-hungry nation’s growing demand. India meets about three-fourths of its energy requirements through imports and aims to reduce its dependence on oversea suppliers to half in the next seven years.