Myanmar villagers want share of energy bonanza

For decades the islanders of Shweri Chai, a speck of land in the Bay of Bengal, have extracted oil using makeshift pulleys to draw the reddish liquid from the ground. But with foreign investors salivating over the energy potential of their resource-rich but desperately poor nation, the locals fear the windfall they have relied upon for so long may soon disappear. "Before, there were a lot of traditional drillers in the region but because of foreign companies, there are a lot fewer," said islander San Kyaw, 60. Myanmar is rich in oil and gas and currently France's Total, in partnership with US energy giant Chevron, and Malaysia's Petronas are among the overseas firms enjoying the fruits of a tie-up with Myanmar Oil and Gas Enterprise. Meanwhile only 13 percent of the population has access to electricity, according to 2009 figures from the World Bank. Critics say the rewards of the nation's energy bounty are being shared among foreign investors and the regime, rather than its impoverished people. There is hope that the new government "will be much more accountable and much more transparent with what it does with oil and gas revenues, but it is still to be seen," said Sean Turnell, a Myanmar expert at Macquarie University in Sydney. Locals fear the new government led by former general President Thein Sein, which replaced the junta in March 2011, will do little to share the spoils. "We are victims of a kind of colonialism," said Khaing Kuang San, an activist against the Shwe Gas project, showing a T-shirt emblazoned with the slogan "Our Gas, Our Future." On the tropical island of Shweri Chai, a six hour boat journey from Sittwe, the capital of Rakhine state, San Kyaw's small oil well extracts about 35 litres (nine US gallons) a day. Several men sleep in turn in a shack, which houses the pulley used to heave the precious liquid from about 200 metres (650 feet) below the surface. "I prefer to drill it myself, rather than leaving it to foreigners," he said, pulling at the cable while smoking a cigar. "We've been doing this for 300 years." That may be an exaggeration, but Myanmar is indeed one of the world's oldest oil producers, exporting its first barrel in the 1850s. More than a century and a half later Shweri Chai is proud that it can power its generators from oil produced by its seven wells, providing energy for the small fishing village in a country where power cuts are otherwise routine. But not all the inhabitants of the region, which borders Bangladesh, are as well off, explained Khaing Pyi Soe, party secretary for the Rakhine Nationalities Development Party (RNDP), the dominant power in the regional parliament. "We want some benefits of the Shwe Gas" in order to provide power for the wider state, he said, referring to a set of controversial projects to exploit gas reserves off the coast of Rakhine. These include building an 800 kilometre (500 mile) pipeline to transport Myanmar gas to China, and a parallel line for oil shipped in from Africa and the Middle East. The China National Petroleum Corporation (CNPN) is the major partner in the two pipelines, which will be able to carry 10-13 million cubic metres (350-450 million cubic feet) of gas and 22 million tonnes of oil a year from 2013, according to its website. But opponents of the scheme are not convinced by a CNPN pledge to ensure Myanmar can use the pipeline through its territory "to meet local needs for natural gas". Shwe Gas will generate $29 billion over 30 years, according to a recent report by the Arakan Oil Watch (AOW) a local campaign group. Oil and gas "generated huge revenues, but a lack of transparency and mismanagement have left Myanmar with one of the worst development indicators in the world, creating a resource curse," it said. According to experts, oil and -- more significantly -- gas will be the main focus of foreign investment over coming years, even though the extent of reserves is unknown in a country where exploration has barely begun. According to Central Intelligence Agency (CIA) figures, Myanmar could have 50 million barrels of oil and 283.2 million cubic metres of natural gas -- much of it offshore. The government has gradually assigned chunks of this untapped wealth to overseas firms including from South Korea, India, China and Thailand who, according to AOW, "refuse to publish what they paid the military regime". Far from these considerations, in Rakhine state many simply hope to avoid a similar fate to the farmers who have been evicted to make way for pipelines and oil and gas terminals on the island of Kyaukpiu. "About 10,000 people were evicted just in Rakhine state," said activist Khaing Kaung San. As for the oil drillers of Shweri Chai, they are keen to play down the significance of the potential bonanza beneath their feet. "In the past we drilled more than 100 gallons a day in the village," recalled San Kyaw. "But we closed wells so foreign companies would not come and drill."