Deora: Fresh move

New Delhi, Sept. 24: Murli Deora today launched a diplomatic initiative to renew India’s oil hunt bid in Myanmar.

The oil minister was personally present in the military-ruled state to witness the signing of a deal for three deep-water blocks off the Arakan coast.

The move comes at a time when it seems India has almost given up on a planned oil pipeline with Iran.

Energy-hungry India and China have been competing for Myanmar’s oil and gas reserves and, in recent months, the latter seems to be holding the edge.

Myanmar recently denied GAIL (India) Limited the status of “preferential buyer” for two of its (A1 and A3) offshore gas blocks and favoured PetroChina instead.

Deora’s visit and the signing of a fresh deal today by the Oil and Natural Gas Corporation (ONGC) are part of a fresh drive to win back some of the lost ground in Myanmar.

Under the deal, ONGC will invest $150 million over the next seven years to explore three deep-water blocks in Mynamnar.

The diplomatic initiative is the result of the realisation that chances of getting gas from Iran are remote.

Indian officials today stayed away from the three-nation talks on the proposed pipeline that started in Teheran today on the plea that it was yet to resolve the issue of transit fees with Pakistan.

According to petroleum ministry officials, “The Iranian pipeline is like a mirage ... and if we continue pursuing may close the doors for other business deals (with the West) for us.”

Myanmar has at least 90 trillion cubic feet (TCF) of gas reserves and 3.2 billion barrels of recoverable crude oil reserves in 19 onshore and three major offshore fields.

The offshore gas field of the Shwe project in the Bay of Bengal alone has deposits of 4.8 TCF.

GAIL and ONGC Videsh hold a strategic 30 per cent stake in the two blocks whose output will be sold to PetroChina.

Myanmar’s decision to sell the gas to PetroChina had upset Indian policy-makers.

India had been drawing up plans to move the gas to India through a proposed pipeline from Myanmar’s Arakan state to Bengal via Mizoram and Assam.

As a bait, India even offered Myanmar a $20-million soft credit and was prepared to build a power plant for the electricity-starved country.

However, Beijing had been able to nix these plans, at least for the time being.

It had been a major supplier of military hardware to Myanmar.

Officials said India had too much at stake in Myanmar to take offence and play the jilted suitor.

So it had been co-operating with the military government of Myanmar in combined operations to flush out tribal insurgents from the Northeast.