MEA pulls up oil min, GAIL

The Myanmar government has signed an MoU with PetroChina for selling all gas from Blocks A1 and A3, where GAIL holds 10% and ONGC Videsh 20% equity.

The gas is to be wheeled through a 2,300-km pipeline for an annual transit fee of $130 million a year for 30 years. This has cast shadows over GAIL's plan to bring gas through a pipeline via north-east.

At a recent meeting called by the PMO, foreign secretary Shiv Shankar Menon said the oil ministry and GAIL did not make "concerted efforts" and did not act on the letter of intent from Myanmar issued in February 2004.

"From February 2004 to January 2005, when a ministerial meeting was held, and up to March when President Kalam visited Myanmar, no serious attempt had been made by the oil ministry and GAIL to finalise negotiations," the foreign secretary is learnt to have said.

Additional secretary in the oil ministry S Sundareshan, however, said the Indian embassy in Myanmar was always kept in the loop and was involved in all negotiations.

Menon said in a January 14, 2006 letter, Myanmar had informed the Indian oil minister of the Chinese intentions.

Under the circumstances, the government should have taken the initiative to make a strong bid and clinch the deal during the two bidding rounds for gas. In both rounds, India emerged second to Thailand and the Chinese third.

"Basically, the Myanmar government has got the feeling that the oil ministry, the Indian government and GAIL do not have very serious interest in the energy sector of Myanmar...

The delay in clinching the deal at the bidding stage has provided the Chinese an opportunity to force Myanmar into a commitment by using the issue of support in the UN Security Council," Menon added.