Shell mustn't 'pre-empt' Burma sanctions: UK

Andrew Mitchell, the first cabinet-level EU minister to visit Burma, has warned foreign companies not to “pre-empt” a cessation of EU sanctions on Burma in light of rumours that Royal Dutch Shell will enter the country’s lucrative extractive sector.

The UK’s international development secretary left Burma yesterday evening after his first visit to the country, in which he saw “clear and immutable changes”. Western nations, he said, would be “big-hearted and generous” to the Burmese leadership if it continues on its current trajectory, notably releasing all political prisoners.

But he reserved stern words for the Anglo-Dutch energy giant, whom reports suggest is looking to partner Thailand’s state-owned PTT Exploration in attempting to develop an offshore gas block off Burma’s southern coast.

Shell already works with PTTE in gas and oil fields in New Zealand, and Thailand’s Nation newspaper said the two companies were “in talks” regarding “interesting countries for Shell [which] also includes Burma”, whose energy reserves are drawing increasing attraction from regional neighbours and the US and EU.

The M-11 block in question lies just south of the Irrawaddy delta in the Gulf of Martaban, close to the M-9 block which is also owned by PTTE. Plans are being made to connect these to Thailand via the Zawtika pipeline, which is currently under construction.

Shell is seen as a world leader in deep sea exploration and production (E&P), a capability that PTTE requires to develop M-11, which they own outright. This could see Shell buy a stake in the block.

The oil giant is the fifth largest company on earth and operational in 90 countries, but would become the first major western energy multinational to re-enter Burma since sanctions were enacted in the 1990s. US oil company Chevron and France’s Total have maintained a controversial presence in the country despite the economic blockade.

With several western companies pressing to enter Burma, trade delegations from EU states including Austria and Sweden have over the past year discreetly made exploratory trips.

Mitchell said however that the country’s oil and gas sector was specifically designated as off-limits by EU sanctions, along with timber, gems, jade and arms. The EU carried sanctions over for another year in April but did ease travel restrictions on some senior members of the government, such as foreign Minister Wunna Maung Lwin.

As well as meetings with President Thein Sein and parliamentary speaker Shwe Mann, Mitchell also held talks with Aung San Suu Kyi yesterday at one of the NLD’s 18 free schools for deprived children, an experience the Conservative party minister described as “emotional”.

The UK government has been given much greater access to ministers in Naypyidaw, say diplomats, while the Conservative government of David Cameron has promised to instruct ambassadors to push for British business in their respective countries.

Controversy has surrounded the UK’s foreign trade with questionable regimes however, with British-made weapons discovered to have been used in the brutal suppression of popular protests in Bahrain this year.

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