India eyes military favors for Myanmar oil
By Siddharth Srivastava NEW DELHI - It appears that India is not going to make it easy for China to extend its influence in Myanmar to get a share of that country's rich gas resources. While recent oil negotiations have faltered between India and Myanmar, increased military cooperation might be New Delhi's second-best option to obtain favor and influence in the secretive Southeast Asian country.
Amnesty International this week quoted "credible sources" saying New Delhi has plans to sell military helicopters to Myanmar that will undermine a European Union arms embargo on the military-ruled country.
India's proposed sale of the Advanced Light Helicopter (ALH) made by Hindustan Aeronautics Ltd, and which includes components from Britain, Germany, France, Sweden, Italy and Belgium, may harm the EU's almost 20-year restriction on such sales, whether "directly or indirectly", the London-based group said. However, India has denied Amnesty's assertions, and a Foreign Ministry spokesman in New Delhi called them "completely baseless".
But despite New Delhi's denial of the Amnesty report, there is reason to believe that India will not take China's influence in the area lying down. Indeed, official sources say there is a possibility that an India-Myanmar counterinsurgency-cooperation project could shift from independent tactics to joint operations on Myanmar's territory. New Delhi believes that insurgent groups in India's northeast derive support from Myanmar rebel groups.
Apart from terror strikes, Indian insurgents have been running kidnapping and extortion rackets in northeastern states such as Nagaland, Assam and Manipur. Recently, a kidnapped senior official of an oil company was killed in crossfire between the police and United Liberation Front of Asom militants in Assam.
Recently, India's Ministry of External Affairs scolded the Petroleum Ministry and its Gas Authority of India Ltd (GAIL) for failing to secure the Myanmar government's initial offer of gas from two offshore blocks where two Indian state-owned companies hold 30% equity. At a recent meeting called by the Prime Minister's Office, Foreign Secretary Shiv Shankar Menon said the Oil Ministry and GAIL did not make "concerted efforts" and did not act on a letter of intent from Myanmar issued in February 2004.
Meanwhile, irked by the delays in implementing the Myanmar-Bangladesh-India pipeline and buoyed by China's strategic support at international forums, Myanmar recently signed a memorandum of understanding with PetroChina to supply 6.5 trillion cubic feet (tcf) of gas from Block A of the Shwe gas fields in the Bay of Bengal for more than 30 years.
The decision came as a major blow to India's bid to tap gas from its eastern front. Myanmar's gas resources were estimated at 18tcf in 2005. Myanmar and China have also agreed on a project to build a pipeline to transfer oil to southern China.
GAIL has also been looking to exit from the A-1 and A-3 blocks in the Rakhine Offshore area over what it claims has been the "difficult" attitude of the Myanmar government toward India's attempts to secure gas. India's largest explorer, Oil and Natural Gas Corp (ONGC), also holds a stake.
Indeed, the thinking in New Delhi seems to be that India, beyond just the economics of buying gas, will have to extend strategic support to Myanmar to stand a chance to outwit China. Official Indian delegations have visited Yangon periodically to convey New Delhi's concerns.
With a pipeline through Bangladesh more or less ruled out because of the intransigent attitude of Dhaka over trade issues and domestic problems in the country, the only other options are to avoid Myanmar by building a longer, more expensive pipeline or to use ships to transport the gas.
Indian intelligence agencies cautioned New Delhi this year about the possible shutting out of Indian interests in Myanmar by Russian and Chinese oil firms. The agencies argued that the decision by oil-savvy Russia and China to veto a US-led move in the United Nations Security Council to address the Myanmar junta's human-rights violations was a critical move in the evolving relationship with Russian and Chinese companies now in the Southeast Asian country.
Now it is apparent that India is also prepared to dirty its hands over Myanmar.
India's gas problems
This is especially true in light of the government's recent dramatic reduction in the estimated amount of domestic gas reserves that were initially announced with much fanfare.
This month, ONGC and the Gujarat State Petroleum Corp (GSPC) announced that finds at blocks off India's east coast were much lower than initially projected. ONGC cut its estimate of the Krishna Godavari basin find to 2tcf from the enormous 21tcf that was initially announced last December. GSPC has also lowered its estimates from the 20tcf first announced in June 2005 to 1.38tcf.
Observers have been saying for long that the Indian government should tighten the norms for announcing oil and gas discoveries to prevent exploration companies from over-reporting or drawing economic and political capital from new finds. And, of course, the latest revised projections cast doubt on New Delhi's recent claim that India will be a gas-surplus nation in the near future.
Last month, Petroleum Minister Murli Deora announced that India would source 1.25 million tonnes of liquefied natural gas (LNG) from Algeria by 2009. India's Petronet will source the gas from Sonatrach, which will add to the supplies from Qatar. ONGC has also kicked off negotiations with the ExxonMobil consortium for importing 8 million tonnes of LNG from the Sakhalin gas fields in Russia.
India, Iran and Pakistan have been trying to sort out pricing, transit and security issues related to the US$7.5 billion Iran-Pakistan-India pipeline. Tehran has said that it hoped to send gas to India by 2011. However, until the deal is finally inked, there is no certainty.
The latest twist in the pipeline negotiations has seen India and Pakistan saying they are opposed to the draft agreement submitted by Tehran that would allow it to revise the price at any time during the contract period. Some observers add that kinks have developed in the Indo-Iranian energy dealings because of US pressure on New Delhi to shun Tehran on all energy matters.
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