Myanmar's Energy Sector: Banking on Natural Gas

Summary

Introduction

Commercial energy use in Myanmar was constrained by both supply and demand factors in the second half of the twentieth century and the associated industries such as coal, oil and electricity played a relatively minor role in the nation's economic growth since independence in 1948. In fact, the two oil shocks (in the early 1970s and 1980s) that followed the action by the OPEC (Organization of the Petroleum Exporting Countries) to raise oil prices barely affected Myanmar's autarkic economy under one-party Socialist rule in which energy independence was maintained through fuel rationing, load shedding and administrative measures. Nevertheless, realizing the importance of energy in modernization and economic development, the Socialist regime formed the Ministry of Energy (MOE) in 1985. The MOE was tasked to oversee offshore oil and gas exploration and development (on a production-sharing basis with foreign oil companies) that apparently held some promise of a major gas find.

When the military regime that assumed power in September 1988 decided to liberalize the state-controlled command economy by introducing market-oriented reforms and allowing foreign direct investment (FDI) in many economic sectors, the pent-up demand for commercial energy rapidly increased. Meanwhile the issue of energy security became an important concern for many developing and developed countries in recent years. These probably led the Myanmar government to undertake institutional reforms in the production and regulation of energy. The MOE was reconstituted in 1989 with one department (Energy Planning Department) and three state-owned enterprises, viz., Myanma Oil and Gas Enterprise (MOGE), Myanma Petrochemical Enterprise (MPE) and Myanma Petroleum Products Enterprise (MPPE). A new Ministry of Electric Power (MEP) was instituted in November 1997 to promote and effectively operate the power sector. The MEP comprises the Myanma Electric Power Enterprise (MEPE, Myanmar's only electricity utility) and a planning and support department called the Department of Electric Power.