Myanmars Attractiveness for Investment in the Energy Sector: A Comparative International Perspective
This report examines the strengths and weaknesses of Myanmar’s business climate in the petroleum and renewable energy sectors: how it compares with other countries, especially in ASEAN; what matters to foreign investors; and how this situation can be improved. Not resting on one’s (new) laurels: The recent international interest in Myanmar may prove counterproductive for the country’s investment climate, if this upsurge in interest induces the government to slow down in its reform efforts. When the novelty of Myanmar wears off, that may become a problem. Indeed, possible signs of such a slowdown can be observed already. According to official data, FDI in Myanmar decreased significantly in the first four months of 2016 compared to the same period in 2015. Investors were increasingly cautious and worried about the slow pace of reform, delays in establishing a panel to approve new investment projects and the lack of clarity on the country’s new economic development strategy (DVB, 2016). This highlights the importance of working constantly to improve the investment climate and staying in close contact with investors, keeping them informed about developments. Challenges common to the petroleum and renewables sectors: Lack of data and information for market entry; fragmented institutional and regulatory framework; low levels of electricity access and digitalization; low international oil prices. Challenges in the petroleum sector: Limited supply-industry infrastructure and lack of local engineers; MOGE petroleum sector monopolization and conflicts of interest; limited geological data; complicated taxation; weak government–business communication; challenges in finding local partners; time-consuming licensing procedures; paper-based communication and lack of e-government; production-sharing agreements biased towards participation of large oil companies, excluding smaller ones; frequent changes in legislation; closed downstream market. Challenges in the renewable energy sector: No national target or legislation on renewable energy; no dedicated public agency regulating the sector; lack of business associations; subsidies for grid electricity generated from fossil fuels disadvantage off-grid renewables; access to suitable land; complex mountainous terrain and protected areas as well as political instability in these areas; underdeveloped grid system for large-scale production; lack of data on the renewable-energy resource potential; limited infrastructure for technical support and maintenance; high cost of installing solar panels and wind turbines; disintegrated biofuel production and supply markets; lack of local specialists; no taxation system for renewables; security risks in conflict-prone Kachin, Rakhine and Shan states. Opportunities in the petroleum and renewable energy sectors: Government commitment to reform; advantageous location as part of the Greater Mekong Subregion and ASEAN, close to the Chinese and Indian markets; significant resource base, especially natural gas, hydropower and bioenergy; rapidly rising energy demand in Myanmar and neighbouring countries; high demand for investment in refineries, oil terminals, oil barges and petrol stations; opportunities in retail business; new petroleum and renewable energy laws are underway; abundant semi-skilled labour, and low cost of unskilled labour; low levels of corruption and criminality. Initially, companies may perceive the business climate as unpredictable, but, having entered the market, and having learned and adapted to local conditions, companies experience greater predictability. Opportunities in the petroleum sector: Relatively transparent tender system; equal treatment of investors; government experience and capacity; market maturity. Myanmar’s strategic location, with rapidly rising energy demand among hundreds of millions of people in the neighbouring countries and low transportation costs (especially for gas delivery to China, India and Thailand), represents an opportunity to foreign investors. Opportunities in the renewable energy sector: Latecomer advantage; low level of electrification increases cost advantage of off-grid electrification; support from international donors; strong civil society actors are promoting renewable energy development.
Hans Jørgen Gåsemyr
Hans Jørgen Gåsemyr (PhD) is a senior researcher at the Norwegian Institute of International Affairs (NUPI).Gåsemyr’s background includes social s...
CANCELLED: Global management of energy areas in a globalized world
A two years long Norwegian-Swedish project has come to an end, and this seminar takes a closer look at globalization, energy transition and institutions of global energy governance.
Promises, promises: The unbuilt petroleum environment in Murmansk
The Arctic as a booming oil and gas province has been a predominant geopolitical representation of the region. However, the shale gas revolution in the United States and the drop in oil prices since late 2014 has reduced the viability of many high-cost Arctic oil and gas prospects. Little scholarly attention has been paid to the consequences of pursued but unrealized natural resource-based projects. This article brings literature from geography and science and technology studies into conversation to map out a preliminary research agenda for understanding how these “shelved futures” are still likely to matter in Arctic communities and policymaking. This conceptual argument is bolstered with a short exploratory case study of Murmansk, Russia. The qualitative-interview based case study illustrates two ways in which the Shtokman gas project retained regional significance, even three years after the project was suspended. Specifically, these are 1) a comparatively negative assessment of the broader socio-economic prospects of the region, and 2) expanded and possibly changed understandings on the part of the different stakeholders (business, government, civil society/the public) about their own and others’ potential roles. The semi-structured interviews with stakeholders primarily focused on recollections of petroleum companies’ corporate social responsibility (CSR) efforts, as these efforts were a concrete harbinger of the much-trumpeted oil and gas future.
PISM Policy Paper no. 2 (155): Gas Security in the Pipeline — Expectations and Realities
The cooperation between Norway and Poland in the energy sector has recently taken very tangible shape. In 2016, Poland decided to launch the Northern Gate project—a set of gas interconnections aiming to link the Polish gas market with gas deposits on the Norwegian Continental Shelf. With that decision, Poland wants to diversify away from Russia to mitigate energy security and political risks connected with the high level of dependence on one supplier. But in terms of Polish-Norwegian cooperation, the question of security of gas supply that Poland wants to address is accompanied by the question of the security of gas demand, a key concern for gas producers such as Norway. Hence, cooperation in the gas sector examined from those two perspectives may actually bring benefits for both countries and promises of win-win cooperation.