Friday, 11 July 2014

Who Will Benefit From Myanmar’s Offshore Oil Rush?

Myanmar is a country rich in natural resources, including minerals, oil, and gas. Yet during the half-century of military junta rule, only a small number of elite families prospered from the country’s natural endowment.

President Thein Sein, who took office in March 2011, today pledged more transparency and economic reform to benefit the population broadly. Yet it remains to be seen whether his policies can live up to his promises.

One crucial area to watch is the auctioning off of onshore and offshore oil and gas exploration rights. In the past year, Myanmar has awarded 36 major oil and gas blocks to 47 companies, including both local and international corporations. But little information is publicly available about the owners and ultimate beneficiaries of these companies—raising concerns about secrecy and the potential for kickbacks, money laundering, and other forms of corruption.

In an attempt to obtain information about ownership structures, the London-based watchdog NGO Global Witness contacted each of the 47 companies awarded oil and gas blocks. Only 13 have replied.

A few are publicly listed companies, including Royal Dutch Shell (RDS/A) and Italy’s Eni (E). But details are scant about most of the others. Global Witness’s full report (PDF) is available online.

As the report concludes, “In a country with a long history of corruption in the natural resource sector, such secrecy poses serious questions as to who will reap the benefits of these resources.” Noting an unfortunate pattern globally, the report adds: “Secret company ownership structures are used as getaway cars for corrupt politicians, warlords and money-launderers all over the world.”

source: BusinessWeek
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