Myanmar’s natural resources, including offshore oil and gas, are a shared inheri- tance which belongs to the nation’s 54 million people and all future generations. Extraction is effectively the sale of the offshore gas wealth. Extraction-related taxes, royalties, license fees and other sector speci c payments are government receipts in exchange for selling non-renewable mineral wealth. Because of inter- generational equity concerns, this brief therefore avoids the more problematic term “revenue(s)”, and instead opts for terms such as “sale proceeds”.
Myanmar’s offshore gas sale proceeds are forecasted to be USD 1.54 billion or about 10% of the Union Government’s reported revenue for nancial year 2021- 22 (see Table 1).1 As gas is extracted as a non-renewable resource it is no longer available to future generations, thus if gas sale proceeds are spent by the military, it is robbing all future generations of Myanmar of their rightful inheritance and benefits. 2
The Shwe Gas project is one of Myanmar’s four main offshore gas projects and consists of the Shwe, Shwe Phyu and Mya offshore gas elds, located in the Bay of Bengal, Myanmar. The project started production in 2013 and is operated by POSCO International from Korea3 with joint venture partners Gail JJ Ltd, ONGC Videsh Ltd from India, Korean Gas Corporation (KOGAS) and Myanma Oil and Gas Enterprise (MOGE). The project has contributed between USD 214 million and USD 471 million per year from 2015 to 2019.
Although the civilian government between 2015 and 2020 appeared to be seeking to exercise more control over gas sale proceeds (revenues), there is a long history of gas sale proceeds being misappropriated through opaque accounting4 and exchange rate manipulation.5 Since the February coup, the Myanmar military has illegally taken control of the country, killed hundreds and arbitrarily arrested almost 4000 civilians; pressure has been mounting on foreign governments and companies to weaken the economic power of the military. This includes the com- panies invested in the Shwe project: POSCO International, KOGAS, Gail JJ Ltd and ONGC Videsh Ltd.
Importantly, of the four offshore projects in Myanmar, the Shwe gas project is the second largest source of foreign currency for the government. It was forecast to produce 30% of all Myanmar gas for 2020-2021.6 Eighty percent of gas is export- ed to China and approximately 20% is used domestically where it is sold to the military and its business associates and the Myanma Electric Power Enterprise…
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