Originally Published 2003-09-29 12:41:46 Published on Sep 29, 2003
India's urgent requirements for hydrocarbons seem to be prompting it to look for proverbial strange bedfellows. Shrugging off the ideological baggage of the Cold War era and the Nehruvian idealism, India is all set to pursue a realistic foreign policy.
India-Myanmar Energy cooperation
India's urgent requirements for hydrocarbons seem to be prompting it to look for proverbial strange bedfellows. Shrugging off the ideological baggage of the Cold War era and the Nehruvian idealism, India is all set to pursue a realistic foreign policy. The much-publicized visit of the then Indian foreign minister Jaswant Singh to Myanmar in February 2001 succeeded in bringing the alien neighbor in to the strategic planning of India's foreign policy. Jaswant Singh's visit was after 13 years of Rajive Gandhi's visit to Myanmar in 1987. The January 2003 visit of the Myanmar Foreign Minister U Win Aung to India is a critical step in stabilizing this commercially sensible relationship.

In fact, the Indo-Myanmar trade except in the strategic arena of energy has been on the rise during the last one decade. Bilateral ties between the neighbors grew from $87.4 million in 1990-91 to $ 323.43 million in 2001-2002. India's exports were worth $ 37.57 million and imports worth $ 285.86 million. India is the largest export market for Myanmar, claiming nearly one fourth of Myanmar's exports. During the recent visit of Myanmar's foreign Minister a decision was taken to set up a joint Trade Committee (JTC) at the Ministerial level.

Although India has always wanted to import hydrocarbon resources from Myanmar, it never materialized due to various reasons. But the recent negative response from Bangladesh regarding gas exports to India, and India's decision not to continue with plans to import gas from Iran through Pakistan have seemingly contributed to the desire to buy gas from Myanmar.

It was during the 2001 visit of Jaswant Singh to Myanmar that India became serious about bringing gas from Myanmar. During his three-day visit, Jaswant Singh had discussed oil and gas exploration and supplies with General Than Shawe, Chairman of Myanmar's State Peace and Development Council. A decision was taken to explore cooperation in the hydrocarbon and power sectors as New Delhi offered to execute other mutually beneficial infrastructure projects.

The recent visit of U Win Aung has further boosted this cooperation in the hydrocarbon, power and energy sectors, particularly in the exploration of Myanmar's onshore oil and gas reserves. Apart from more focused cooperation in the hydroelectric and energy sectors, issues like joint construction of roads and collaboration in regional bodies were also discussed. The issue of the construction of a hydroelectric project on the Taimati river is likely to be taken up for detailed discussion when an Indian team visits Myanmar in the near future. In fact, the development of the proposed Chidwin river hydroelectric project with Myanmar will be of immense importance for the development of India's northeastern states.

India's major focus is on the A-1 Block northwest of Myanmar where South Korea's Daewoo International plans to drill an exploratory well late this year following the conclusion of its Seismic interpretation, geological survey and prospect evaluation. India's ONGC Videsh Limited (OVL) holds 20 per cent and GAIL and Kogas hold 10 per cent each of the equity stakes in the A-1 Block in Myanmar which extends over 3885 squire meters of the Rakhine coast and is the westernmost block of Myanmar, close to India. Daewoo International holds 60 per cent of the stakes in the project.

Days before the visit of U Win Aung to India, GAIL, in a letter to the Union Petroluem Minister Ram Naik, had informed him that the A-1 Block in Myanmar has in-place gas reserves of 32 trillion cubic feet (tcf) and recoverable gas reserves of 22 tcf which, reportedly, can sustain a peak production of around 60 million cubic meters of gas a day (mmscmd) for at least 2 decades.

Reports suggest that three structural prospects and one lead have been identified from the expert interpretation of both old and new seismic data in the A-1 Block in Myanmar. The first prospect has an assured success ratio of more than 42 per cent and potential gas reserves of 10 tcf. The well might take a few months for completion. The GAIL chairman Proshanto Banerjee said that GAIL is building a 550 km long offshore pipeline with an estimated cost of Rs. 20 billion.

Daewoo wants either sell gas to India or construct an LNG plant. The former option, however, seems to be more appealing to all involved in the deal. As far as building of a pipeline is concerned, there are two options. A pipeline can be built from A-1 Block to India through the Exclusive Economic Zone (EEZ) of Bangladesh and the nearest landfall point in India in this case is Haldia in West Bengal. But the government of Bangladesh has to agree to it. This may prove to be a difficult task given the nature of anti-India posture adopted by the present Bangladeshi government, and more so in the light of the recent statements by the Bangladeshi Foreign Minister and the Prime Minister. The second option is to build a pipeline avoiding the Bangladesh territory, which means building a larger pipeline, which includes deep waters of up to 2000 meters of the Bay of Bengal seafloor.

The furthering of energy cooperation with Myanmar is certainly an opportune move in the right direction. Given the fact that both China and India are strategic competitors in Myanmar, it is a folly not to engage Myanmar where China has been consistently strengthening its foothold over the years. It has been reported that China has exported arms worth two billion dollars to Myanmar in the recent years. Thus for India not engaging Myanmar would mean allowing China to have a free hand there which can eventually prove to be costly for India.

The issue of constructing roads to connect India and Myanmar is also significant. The land opening could help India in reaching ASEAN countries, as Myanmar is the only ASEAN country having a land border with India. Strengthening relations with Myanmar is also imperative in the light of the initiation of BIMSTEC (Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation) and Mekong-Ganga Cooperation. If the proposed pipeline can be negotiated through Bangladesh, it can also lead to increased chances of intra-regional cooperation. It is also in the interests of India to make the pipeline plan a success story because India needs to look for alterative sources of energy.
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