Weekly Business Roundup (November 7, 2009)

French Firm among Developers Moving into Shwe Gas Field

More foreign companies, including a French engineering specialist, have been hired to begin the multibillion dollar development of Burma’s Shwe offshore gas field.

A consortium led by South Korea’s Hyundai Heavy Industries has secured a US $1.4 billion contract from main project controller Daewoo International to build and install a huge 40,000-tonne well platform and pipelines, plus a port terminal.

Hyundai’s chief partner will be Paris-based DORIS Engineering, an offshore gas development specialist.

In addition, the Indian government-owned Oil and Natural Gas Corporation (ONGC), a partner of Daewoo, has disclosed it will invest about $174 million in the Shwe development.

Indian media this week quoted unnamed onGC officials as saying the firm will use its investment for gas production and marketing.

ONGC and another state-owned firm, GAIL, have a combined stake in the Shwe project of more than 20 percent under main shareholder Daewoo, which disclosed recently that a total of $3.2 billion will be spent on bringing the Shwe gas ashore.

India had hoped to buy most of the 200 billion cubic meters in two blocks of the Shwe field, but the Burmese government awarded virtually all of it to the Chinese state-owned China National Petroleum Corporation.

China Confirms its Plan to use Burma as a Mideast Oil Conduit

The state-owned oil giant China National Petroleum Corporation (CNPC) says it has begun constructing an oil pipeline which will run for nearly 800 kilometers through Burma from the Arakan coast to the Chinese province of Yunnan.

Announcement of building work comes as the Chinese state-controlled media also for the first time confirmed that China is constructing an oil transshipment port on Ramree Island in Arakan State.

Beijing claimed that CNPC had “started building” the deep-draft port at Kyaukphyu, when in fact the terminal has been under construction for some time and is reported to be well on the way to completion.

The pipeline will be capable of transporting up to 12 million tonnes of crude oil a year, or 240,000 barrels per day, reported the Chinese official news agency Xinhua.

This also marks the first time that China has confirmed it is using Burmese territory as a short-cut conduit to transit oil supplies from the Middle East and Africa.

The formal announcement comes just days after a coordinated petition campaign by scores of human rights group left protest letters at Chinese embassies in Asia, Australia and Europe urging he Chinese government not to build oil and gas pipelines through Burma.

It was said the groups are “gravely concerned” for communities living along the pipeline routes, citing past examples of abuse by the Burmese military when such projects are developed.

Indian Car Show Attracts Burmese Hunt for Investors

Burma is to take part in a major Asian car show being held in India in January, according to a report quoting the officially sanctioned Burmese commerce association.

The six-day show in New Delhi will be the biggest of its kind in Asia, drawing together more than 20 vehicle manufacturers.

The Union of Myanmar Chambers of Commerce and Industry will take part “to seek international cooperation for the development of Myanmar’s car manufacturing industry,” said the Chinese news agency Xinhua, quoting unnamed chamber sources.

Burma’s participation comes amid reports that India’s Tata Motors Company is to develop a truck factory in Burma to make components.

Japanese Business Team Visits Burma to Boost Trade

A 30-strong team from a Japanese business association has been visiting Burma this week to discuss ways of expanding commercial links.

The team included representatives from the Japanese government-funded Japan External Trade Organization (JETRO), according to media reports.

The Japanese Chambers of Commerce and Industry team was hosted by the junta-linked Union of Myanmar Chambers of Commerce and Industry.

Among other issues, the Japanese are particularly interested in further developing imports of Burmese-made clothes.

Japan last year imported a record $138 million worth of garments from Burma, which was nearly 40 percent more than in 2007, said one report by the Chinese Xinhua news agency.

JETRO’s involvement included further discussions on Japanese technical help in developing all-season use of Burmese rivers and rebuilding some marine facilities destroyed by Cyclone Nargis last year.