Weekly Business Roundup (September 26, 2009)

New US Policy ‘Still Needs to Stop Junta Income from Gas’

The change of US government policy to permit talks with the Burmese government while maintaining economic sanctions could be a “positive step forward,” says the human rights group that recently exposed how the regime siphons off billions of dollars from gas income.

US Secretary of State Hillary Clinton said this week that Washington will reverse a Bush presidency policy of totally ostracizing the regime to “engage” with the junta generals in a bid to promote change.

EarthRights International (ERI) has produced a detailed report revealing how, despite sanctions, the junta leadership has siphoned off as much US $4.83 billion from the national budget in revenues from industrial giants Chevron and Total’s operation of the Yadana gas field. The money was secretly transferred to the DBS Bank and the Overseas Chinese Banking Corporation in Singapore, despite US sanctions meant to prevent such activity, said ERI.

“We fully support new and fresh ideas for how the US government and others can support the people of Burma,” ERI’s Matthew Smith told The Irrawaddy.

“However, we hope governments will actively explore new ways to pressure the military elite, most notably by applying multilateral pressure on Burma’s petroleum sector and on the multi-billion dollar revenues generated by Total and Chevron’s Yadana gas pipeline to Thailand.”
As long as the Burmese junta has easy access to revenues, “even new policies risk failure,” warned Smith.

Main Shwe Gas Developer is Subject of Takeover Rumors

The main foreign developer of Burma’s massive offshore Shwe gas field, Daewoo International, may be up for sale.

Almost 70 percent of the South Korean industrial conglomerate is owned by Korean banks and the state-controlled Korea Asset Management Corporation (KAMC).

Reports from Seoul this week say two other South Korean industrial firms, steelmaker Posco and chemicals producer Hanwha, are negotiating to buy the bank and KAMC shares—estimated to be worth about US $2.5 billion.

Daewoo is the main developer at Shwe with a 51 percent share in the foreign partnership about to begin gas production for sale to China.

Daewoo earlier this month disclosed that the cost of developing the Shwe gas field would be $3.2 billion.

South Korean business activities are often cloaked in secrecy and it’s not clear yet what effect a majority takeover of Daewoo would have on its international activities.

Daewoo’s Shwe partners include Korea Gas, which is also South Korean state owned. continue

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