Burma Business Roundup (July 12)

[News_Editor]

British Cigarette Firm that Worked with Burma Military Returns

British American Tobacco (BAT) of the UK has announced plans to invest about US$50 million in a new factory in Burma to produce cigarettes.

“We are truly excited with the post-sanctions development in Myanmar and are keen to play an active part in the country’s economic and social advancement,†the firm was quoted by London’s Financial Times as saying.

BAT operated a business in Burma until 2003 when it quit under pressure from the British government and human rights group Burma Campaign UK.

It is re-entering the country in a joint venture partnership with IMU Enterprise, a subsidiary of Burma’s Sein Wut Hmon Group.

In 2003, BAT sold its 60-percent share in in Rothmans of Pall Mall Myanmar Pte Limited to the Singapore-based Distinction Investment Holdings.

BAT’s business up to 2003 in Burma was in a partnership with the Union of Myanmar Economic Holdings Ltd, a Burmese military owned company – hence the pressure for BAT to quit.

Thai Businesses Lead the Field in Investing in June

Thai businesses continue to be the biggest investors in Burma, leading the field of foreign investment in June with US$379 million out of the month’s total of $423 million.

Thai investment was well ahead of the second highest investor country, Singapore with $23.68 million, followed by Britain with $15.8 million, China $4.1 million and India $9.6 million, figures from Burma’s Directorate of Investment and Companies Administration.

The directorate said investment ranged over numerous businesses, including textiles, gas exploration and production, agriculture and real estate, notably commercial buildings such as hotels.

During June, 14 overseas companies were approved to start businesses in Burma under the Foreign Investment Law, said the directorate.

China still remains overall the biggest investor in Burma for the past five years, but since the liberalization under the Thein Sein government Thailand has sharply increased its interests.

Thai State Oil Firm PTTEP Finds Gas in Burmese Waters

Thailand’s state-owned PTT Exploration & Production oil firm has reported finding gas during test drilling at the M-3 Mottama offshore block.

The block, in the Gulf of Martaban, is adjacent to other blocks where PTTEP is operating and preparing to produce large volumes of oil. PTTEP is the operator of M-3 with Japanese partner Mitsui Oil Exploration Company.

The Thai firm has not yet given any definitive estimates of the potential size of the gas find.

Another Gulf of Martaban field being developed by PTTEP, the Zawtika block, has confirmed gas reserves of at least 50 billion cubic meters.

Under previously agreed contracts, most of the Zawtika gas will be imported by Thailand. However Burma’s state owned Myanmar Oil & Gas Enterprise has told Burmese media that gas from the Mottama block would mostly be for domestic consumption to help fuel Burma’s electricity expansion.

PTTEP is carrying out exploratory surveys and drilling in two other offshore blocks, the M-7 and M-11, also in the Gulf of Martaban, plus two onshore blocks in central Burma in the Naypidaw region.

Electricity Ministry Seeks Gas Imports for New Power Plants

The Ministry of Electricity said it is drawing up plans to import liquefied natural gas (LNG) to fill a gas shortage.

The LNG would be used to fuel four new small power plants being built in the greater Rangoon region, said Aung Than Oo, ministry deputy minister.

Although Burma produces large volumes of natural gas offshore it is all committed for export under long-term agreements, going mostly to Thailand and China.

The ministry said it will need 230 million cubic feet per day to fuel the four plants with a combined electricity generating capacity of 270 megawatts.

To import LNG, which is expensive, Burma would also need a special processing terminal.

The ministry said it has invited tenders from firms interested a contract to procure LNG from overseas and to build a processing unit in Burma.

Source: Irrawaddy.org