08.05.2018 Author: Dmitry Bokarev

Myanmar Leads Russia to the Bay of Bengal

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The Republic of the Union of Myanmar (RUM) is one of the important members of the Association of Southeast Asian Nations (ASEAN). This country is of no small importance for the entire Asia-Pacific Region, and such important players as India, China, and the USA are fighting for its attention. It is worth noting that Myanmar is successfully developing relations with Russia.

Myanmar has the rapidly developing economy and extensive natural resources. In addition, it has the favourable geographic position: Myanmar borders with China in the north, it is washed by the Bay of Bengal in the south, which also bounds India and Bangladesh. It is the “gate” to Southeast Asia both for China and India. In addition, China has access to the Bay of Bengal of the Indian Ocean through Myanmar. This fact is very important for China due to several reasons: first, the largest sea port of Myanmar Yangon is an important venue of the Maritime Silk Road of the 21st century, the sea transport corridor connecting China and Southeast Asia with Europe and Africa. The work on this corridor is an important part of the Chinese global infrastructure project “One Belt – One Road” (OBOR).

Second, Myanmar is an important part of the transport corridor “China-Myanmar-Bangladesh-India”. There is no doubt that the creation of the corridor connecting such rich countries as China and India will have great importance for the entire regional trade.

Finally, Myanmar is important for China’s energy security. As is well-known, a significant part of the hydrocarbon fuel consumed by China is supplied from the Middle East states by sea passing through the narrow Strait of Malacca, which can be blocked by the opponents of China in theory (for example, in a case of further sharpening of the territorial disagreements in the South-China Sea). In order to prevent such a risk, China decided to supply a part of its oil and gas using pipeline through the territory of Myanmar. As we have mentioned, it has access to the Indian Ocean. The sea route from the Middle East to Myanmar is shorter, and it is more difficult to block it.

Thus, it can be recognized that Myanmar has the strategic importance for the entire region, which Russia’s major interests are related to. Development of relations with China, India, and ASEAN states is famously among the most important tasks of the Russian foreign policy. It is no wonder that Russia lays importance on the interaction with Myanmar. The two countries have a long and successful history of cooperation on such essential issues as power industry, heavy industry, and security.

For example, Russia renders assistance to Myanmar in such important issue as the development of the oil extracting industry. According to the Myanmar Ministry of Energy, the country’s oil reserves amount to over 3 billion barrels. According to the Western sources, this figure is much smaller and amounts to about 50 million barrels. Nonetheless, the volume of oil production in Myanmar is about 20 thousand barrels a day, with a consumption of 60 thousand barrels a day according to the available data. The country faces a sharp oil deficit and has to import significant volume of “black gold”.

Myanmar is currently trying to increase the production of oil and other hydrocarbons by inviting companies from other countries, including Russia, to explore new deposits.

In 2013, the Russian oil company Bashneft won the tender to explore and develop the deposits at a large lot of the Central oil-and-gas bearing basin of Myanmar. It should be noted that the hydrocarbons have been mined in this region for a long time, it has a well-developed infrastructure required for the oil and gas transportation. The availability of significant resources at the lot obtained by Bashneft raises no doubts. This fact proves the high level of confidence to the Russian partners on the part of Myanmar leadership, and its desire to develop cooperation with Russia in the oil and gas industry.

In August 2014, Bashneft International B.V. (A subsidiary of Bashneft), Myanmar Oil and Gas Company and Sun Apex Holdings Ltd, a company from Myanmar, signed a production sharing agreement. In accordance with the agreement, the parties are obliged to carry out exploration, including well boring, and invest $38.3 million in the project in years ahead. The Russian company is the project operator, and the share of its participation in the agreement is 90%.

In September 2017, the Deputy Minister of Energy of Myanmar T. Min announced at the meeting of the Russian-Myanmarian intergovernmental committee that Bashneft operated very actively and demonstrated good progress. He also reported that other Russian companies also demonstrated interest in Myanmar’s deposits.

Myanmar highly appraises Russia’s assistance in security provision. Since the declaration of independence of Myanmar (Burma) in 1948, numerous groups of separatists and extremists of various kinds are operating on its territory fighting against the official government of the country. Despite a significant reduction of tension reached over the last years, armed conflicts break out from time to time, and Myanmar needs the assistance of its partners in the military sector as before.

A significant number of the Russian military equipment serves the military forces of Myanmar: tanks, helicopters, fighters, air defense systems, etc. Russia supplies combat vehicles to Myanmar’s Army and helps to maintain its efficiency. Thus, in October 2017, a group of Russian experts from the Russian Helicopters Company arrived in Myanmar to repair several helicopters produced in Russia.

Despite the active military and technical cooperation with China, Myanmar continues purchasing military equipment from Russia. It decided to obtain six Su-30 fighters. The corresponding contract was signed in January 2018 when the Russian Minister of Defense Sergey Shoygu visited Myanmar. One more important agreement signed between Russia and Myanmar on the same occasion – an agreement on the simplified entry of warships into the ports of Russia and Myanmar. Taking into consideration the above-mentioned strategic location of Myanmar, this agreement may result in a significant increase in the Russian influence in the region. This event is especially interesting amidst the media statements on a possible restoration of the Russian military base Cam Ranh in Vietnam, which is the major partner of Russia among the ASEAN member states.

The growing military presence of Russia in Southeast Asia, especially in such a strategically important location as the Bay of Bengal, demonstrates that Russia is a potential regional player due to its large-scale and consistent cooperation with the local states, and it will continue strengthening its positions.

Dmitry Bokarev, political observer, exclusively for the online magazine “New Eastern Outlook.


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