MYANMAR'S ENERGY SECTOR: Banking on Natural Gas

By Than, Tin Maung Maung | Southeast Asian Affairs, January 1, 2005 | Go to article overview

MYANMAR'S ENERGY SECTOR: Banking on Natural Gas


Than, Tin Maung Maung, Southeast Asian Affairs


Introduction

Commercial energy use in Myanmar was constrained by both supply and demand factors in the second half of the twentieth century and the associated industries such as coal, oil and electricity played a relatively minor role in the nation's economic growth since independence in 1948. In fact, the two oil shocks (in the early 1970s and 1980s) that followed the action by the OPEC (Organization of the Petroleum Exporting Countries) to raise oil prices barely affected Myanmar's autarkic economy under one-party Socialist rule in which energy independence was maintained through fuel rationing, load shedding and administrative measures. Nevertheless, realizing the importance of energy in modernization and economic development, the Socialist regime formed the Ministry of Energy (MOE) in 1985. The MOE was tasked to oversee offshore oil and gas exploration and development (on a production-sharing basis with foreign oil companies) that apparently held some promise of a major gas find.1

When the military regime that assumed power in September 1988 decided to liberalize the state-controlled command economy by introducing market-oriented reforms and allowing foreign direct investment (FDI) in many economic sectors, the pent-up demand for commercial energy rapidly increased. Meanwhile the issue of energy security became an important concern for many developing and developed countries in recent years. These probably led the Myanmar government to undertake institutional reforms in the production and regulation of energy. The MOE was reconstituted in 1989 with one department (Energy Planning Department) and three state-owned enterprises, viz., Myanma oil and Gas Enterprise (MOGE), Myanma Petrochemical Enterprise (MPE) and Myanma Petroleum Products Enterprise (MPPE). A new Ministry of Electric Power (MEP) was instituted in November 1997 to promote and effectively operate the power sector. The MEP comprises the Myanma Electric Power Enterprise (MEPE, Myanmar's only electricity utility) and a planning and support department called the Department of Electric Power.

The government's current energy policy has the following objectives:

* To maintain energy independence

* To employ hydroelectric power as one of the vital sources of energy sufficiency

* To increase the generation and distribution of electricity for economic development

* To conserve non-renewable energy for the nation's future energy sufficiency

* To promote efficient utilization of energy and emphasize energy conservation

* To prevent deforestation caused by excessive use of firewood and charcoal.2

Together with the ministries of mines (responsible for coal mining), forestry (development of biomass fuels), education (basic and applied research) and science and technology (development of renewable power sources and measures to increase energy efficiency), the MOE and MEP are the main government agencies that control and influence the supply of commercial and household energy in Myanmar.

In the following sections the current status of energy stocks and trends in the supply, management and consumption of Myanmar's energy resources are delineated - though the study has to contend with the paucity of information on Myanmar's energy sector.

Energy Resources

In line with the international convention on classification of energy resources, Myanmar's energy resources may be categorized as non-renewable and renewable sources depending on their nature and characteristics. The former constitutes oil and gas, coal, and fissile material while the latter, for all practical purposes, include hydropower, wind, solar, geothermal and biomass energy sources.

Oil and gas

Many of Myanmar's onshore oil fields, after yielding over 300 million barrels, are now severely depleted and only three of the six new fields discovered since 1991 are currently producing crude oil regularly.3 Nevertheless, MÖGE claimed to have discovered some 3.

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