mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
The Great Burma (Black) Gold Rush

Once a closed economy run by a military junta where only Chinese firms were comfortable doing business, the newly “transparent” and “democratic” Burma has been freed from sanctions and is now open to all comers. And boy are they coming.

Attracted by Burma’s storied wealth in natural resources like gemstones, lumber, oil and gas, foreign firms are flying into the country in droves. Oil and gas could be the most enticing of Burma’s many valuable commodities, though estimates of how much is actually there range widely. The US Energy Information Agency puts technically recoverable reserves at a respectable 50 million barrels of oil and about 10 trillion cubic feet of natural gas. Oil execs are hopeful there is much more yet to be discovered.

Because exploration (especially offshore) has been limited, numerous foreign energy companies are on the move. “There has never been a better time for you to come to Myanmar and search for opportunities in the oil and gas sectors,” Burma’s Energy Minister Than Htay told Big Oil bigwigs at a conference in March last year. Another conference attended by international oil companies took place in Yangon today; the Burmese government pledged to put up “over 20” offshore blocks for auction by April. This is in addition to 18 onshore blocks opened for bids in January. “In our language,” a Burmese oil tycoon told Agence France-Presse, “we call [oil and gas fields] ‘treasure troves’ as we can expect that they can bring us a large amount of treasure.”

A related story confirms just how important Burma is, geographically and environmentally: a 495 mile gas pipeline from the Bay of Bengal across Burma to China’s Yunnan province will begin operating in June, and a parallel oil pipeline is expected to come online in September. These pipelines will allow China to bypass the heavily trafficked Straits of Malacca to import some of its energy. A reporter for China’s state-run China Daily called this “a super win-win deal.”

Burma’s wealth of natural resources makes it all the more important in the struggle for power in Asia that we’ve been calling the “Game of Thrones.” Though Burma’s infrastructure is still rudimentary, the country is intensely attractive to foreign companies looking for emerging, undeveloped markets to invest in. Burma also sits astride one of the most important sea trade routes in the world, and its territory abuts China—for now the most populated and resource-hungry market in the world. These are big opportunities for an infant democracy. There will no doubt be all kinds of bumps along the road, but overall Burma’s economic future looks bright.

[Oil rig image courtesy Shutterstock.]

Features Icon
© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service