Dhaka delays controversial gas project

Bangladesh will not proceed with plans to explore for oil and gas in the Bay of Bengal until a dispute over maritime boundaries with Burma is resolved.

Arbitration will continue and the project will aim to resume in four years, Bangladesh’s foreign minister Dipu Moni told parliament on Wednesday. The UN is brokering the mediation, but Dhaka will push for direct talks with Burma as well.

The ownership of around 150,000 km2 of offshore territory is being claimed by both countries, and the fiery dispute has raged over several years; in November 2008 the Burmese government effectively sold lucrative gas blocks, claimed by Bangladesh, for exploration to a South Korean company, triggering a naval standoff.

It peaked in October last year when Bangladeshi and Burmese warships lined up against one another in the Bay of Bengal, with Bangladesh saying it would do whatever it could to “protect the nation’s assets.

Although Dhaka has said that “resource constraints” in the country warrant immediate exploration, it acknowledges that the dispute must be resolved until any exploration is undertaken. Legal documents have been sent by Bangladesh to the International Tribunal for the Law of the Sea (ITLOS), which is mediating the affair.

International law of the sea stipulates that a country’s exclusive economic zone (EEZ) stretches 200 nautical miles from the coast. This has resulted in overlapping claims between the two countries, while Bangladesh is also at loggerheads with India over a similar dispute involving offshore oil and gas blocks.

Bangladesh claims ownership of 28 oil and gas blocks, while India and Burma say they have the rights to 17 blocks in the disputed waters of the Bay of Bengal.

Bangladesh’s 160 million-strong population is hungry for energy: the country suffers frequent electricity shortages and its current energy reserves cannot cater for a swelling population crammed into an area the size of Burma’s northeastern Shan state.

Burma on the other hand is eyeing its export market, with neighbouring Thailand a keen recipient of its gas. Official government statistics claim that Burma owns 90 Trillion Cubic Feet (TCF) of gas, although outside estimates are far less, at around 20 TCF. Vast areas however remain unexplored, and the overlapping claims of Bangladesh and Burma offshore blocks are thought to be healthy.

The Burmese government in March this year urged a redrawing of the boundary demarcation with Bangladesh, and Dhaka responded that it would weigh up the proposal. Burma is due to respond to the ITLOS by 1  December this year.

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