RANGOON — Burma's rich natural resources include oil and gas in abundance, in largely unexplored blocks. As those blocks are drilled, the government faces questions about revenue transparency, and how to balance building a domestic power market with exports.
Minister of Energy Zaya Aung postponed the anticipated announcement of the winners of the offshore gas exploration bidding at an oil and gas conference in Rangoon this week, but assured reporters that revenue from oil and gas sales would be publicly reported in the national budget.
"It is very easy because all of the budgets incoming from the oil and gas sector it goes to our country's budget," he said.
In the past, international rights groups have accused members of the government of depositing revenue from large energy projects and natural resource sales in private offshore bank accounts.
As the country's final remaining unexplored reserves are being allocated, Burma, also known as Myanmar, is preparing to become a member of EITI, an international extractive industries transparency watchdog group.
According to the ministry of energy in 2012, Burma has over 25 trillion cubic feet of gas reserves, mostly offshore, and 2.1 billion barrels of oil reserves, most of it in completely unexplored fields. These figures are unconfirmed, and largely disputed. British Petroleum's annual 2013 annual statistical review of the world's energy puts Burma's gas reserves at just 0.2 trillion cubic feet.
Burma suffers from power shortages despite its natural resources, and over three quarters of Burma's electricity for the domestic market is generated through hydropower.
The Burmese government plans to get 80 percent of households in the country on the power grid by 2030, according to a 2013 electrification plan put together with the Japanese government's development agency. Burma's current electrification rate is below 30 perecent, one of the lowest in Asia. Power demand is expected to double in the next fifteen years, according to the ministry of energy.
Minister Zaya Aung told reporters they would continue to require 20 percent of gas from both onshore and offshore blocks remain for use in the domestic market.
John Roberts, a specialist in the energy sector and securities consultant said it was likely the government would be able to be transparent with its reporting of oil and gas income, though he said it was not uncommon for oil and gas companies to provide members of government with a way to accumulate funds to which they were not entitled.
He said, however, that the government faced a greater challenge in maintaining accountability and political stability as it balanced the export market with increasing domestic demand.
"In the case of Myanmar the key issue is how much gas and oil get developed for the export market and how much do you develop it for a rapidly developing domestic market in order to make sure you don't get brownouts. The other question of course is that of regional and political stability," said Roberts.
This week, hundreds in Kanbauk, Tenasserim division in southern Burma, gathered to protest against several large oil companies operating there, after they were angered by environmental damage and their poor electricity supply despite being so close to power generating resources.