MGIMO Applicant(U) Russian Foreign Ministry

Keywords: Myanmar, China, energy, oil and gas, pipeline

In January 2015, a grand opening ceremony was held, while in test mode, of the Myanmar-China oil pipeline, which, together with the previously laid gas pipeline, symbolizes the successful outcome of bilateral cooperation in the energy field and the art of Chinese diplomacy in solving energy problems. However, the road to success was long and not easy.

After the popular uprising of 1988* and the military once again came to power, a new stage of Myanmar's foreign policy and bilateral relations with China began, which continues to this day. For the first time in many years, the leaders of the Myanmar Government began to travel abroad to establish foreign policy and foreign economic relations with other states. At the same time, the country's leaders visited China more often than any other country.

Myanmar was gradually opening up to the world, and many countries were looking forward to filling its market niches. To put an end to its reputation as a "rogue state," the Myanmar Government has long and carefully considered its plan for integration into international relations, with a particular focus on its closest neighbor. It was from this time that Myanmar-China good neighborly relations "paopho" (translated from Burmese. - relative) found life again and began to develop actively.

At the same time, China, which pursued the policy of "hiding its abilities and biding its time", put forward by the reformer Deng Xiaoping, gradually increased trade and economic relations with its neighboring country and waited for the right time to start implementing major energy projects. For Myanmar, a positive factor in improving relations with China was the end in 1989 of the Communist Party of Burma, which had been waging a long war with government forces. Until the late 1970s, the Communist Party of Burma was sponsored by China to spread Maoism and overthrow the Burmese government.¹ However, in the 1980s, the PRC finally realized the harmfulness of supporting the Communist Party and, in order to normalize relations with Burma, stopped providing it with assistance.

After the events of 1988, the first wave of sanctions against Myanmar was imposed by the West, imposed in connection with the illegal coming to power of the military government and the failure to recognize the results of the parliamentary elections, which were won by the Democratic Party led by Aung San Suu Kyi. By tacitly supporting the military government, Beijing has confirmed its official position of non-interference in the internal affairs of other states, including Burma, and has also secured a quick and easy rapprochement with its neighbor, which has been closed to the outside world for several decades.

The next step in improving bilateral relations was China's significant economic assistance to the country to overcome the consequences of the 1997 Asian economic crisis. This step towards Myanmar strengthened mutual trust between the two countries. Myanmar's leadership realized that cooperation with the" big neighbor " has a huge economic potential.

Today, China is in dire need of energy resources. By the end of 2015, their total consumption was 22.9% of the global total2. About 80% of these resources are imported to China by sea from Central Asia, Africa, and Latin America; however, along the route - in the Straits of Malacca and Taiwan, as well as in the South China Sea-China's territorial disputes with some Asian States persist.³

Any increase in political tensions in the region could affect China's energy security. Therefore, the transportation of energy resources by sea today remains an acute problem for it.

Faced with the threat to the safety of maritime transport, China has taken a number of" precautionary " measures. First, significant reserves of oil and gas were created. Second, increased attention was paid to laying oil and gas pipelines.-

* An inflationary and demonetization-driven popular uprising that engulfed all of Burma against the existing regime in favor of democratic reform.

dov by land - Russia-China, Kazakhstan-China and China-Central Asia. Third, an oil and gas pipeline (hereinafter NGP)was constructed Myanmar-China, thanks to which, as noted by A. A. Simonia, a well-known expert in the field of Myanmar's economy, this country "will play a key role in ensuring China's energy security"⁴.

MYANMAR OIL AND GAS

Myanmar has a roughly 160-year history of oil production. Today, there are 50 million tons of proven oil reserves here. bbl.⁵-this is less than 0.1% of the world (79th place in the world)⁶. Natural gas reserves - 0.3 trillion cubic meters - 0.2% of the world's ⁷ (40th place). However, according to some estimates, these reserves reach 2 trillion cubic meters.⁸

The" oil and gas relations " between Myanmar and China began only recently - only at the beginning of the XXI century, when Chinese companies began to participate in oil and gas exploration projects in the neighboring country. A consortium formed by China National Petroleum Marine Corporation in Myanmar (CNOOC Myanmar Ldt) , Singapore-based Golden Aaron Pte, and a subsidiary of China National Petroleum Company (HQC)*, has entered into an exploration and production sharing contract with Myanmar National Petroleum Company (MOGE), which is subordinate to the Ministry of Energy.

Exploration work has begun onshore in western Rakhine State on Block M (see map), offshore Block A-4 in the Bay of Bengal and a second offshore block M-10 in the Andaman Sea off the coast of the Tenasserim Administrative Region. In 2005, the same consortium signed a cooperation agreement on the S-1 and S-2 continental blocks and the M-2 offshore block.

In 2004, MOGE and Sinopec's Dianqiangui Oil Field Exploration Division signed a production sharing and exploration agreement for Rakhine State in western Myanmar on Block D ⁹. A year later, Dianqianyui and MOGE began implementing the first joint oil and gas exploration project in Myanmar, which aimed to discover an oil field with a volume of at least 1 million tons. Thus, the so-called "three tanks of oil" - China's main state-owned oil and gas companies: Petrochina, Sinopek and CNNM * * - paved their way to the proposed energy resources Myanmar, covering a total area of 80 thousand square kilometers by geological exploration. True, attempts to find "big oil" were not crowned with success, but together large deposits of natural gas were discovered.

The main natural gas reserves are contained in the continental shelf of Myanmar. The largest gas field is Shve (A - 1, A-3). The Etagun, Yadana, Shvepyu and Mya deposits can also be counted among the rich ones. Shortly after the discovery of the Shwe field in 2004, India proposed a project to build a gas pipeline to this country. Interested in developing this field, China in 2007 proposed the construction of a "Myanmar" oil and gas pipeline consisting of two parallel pipes-from the coast of the Bay of Bengal to the southwestern province of Yunnan in China. Thus, the Myanmar government was faced with a serious choice between China and India.

However, in October 2007, another "saffron revolution" broke out in Myanmar, caused by a sharp increase in fuel prices, and subsequently food prices. Thousands of saffron-colored Buddhist monks have taken to the streets of Yangon, the largest city and former capital, to join anti - government demonstrations demanding democratic change and the resignation of the military. The revolution developed spontaneously, it is also called a "revolution without leaders" because of the lack of specific responsible persons.

Following the saffron revolution, the UN Human Rights Council approved a resolution on Myanmar, ¹⁰ and in November 2007, the Third Committee of the General Assembly adopted a draft resolution condemning human rights violations in Myanmar.¹¹ However, the UN Security Council, thanks to the PRC and the Russian Federation, adopted only a statement, not a resolution, replacing the words " condemns "¹² with" expresses regret " (italics-I. R.) in connection with the use of violence and "calls for immediate" with "emphasizes the importance" (italics - I. R.) of the early release of political prisoners ¹³.

It should be noted that the permanent members of the UN Security Council, China and Russia, defended Naypyidaw from the first attempts to put the issue of Myanmar on the agenda of the UN Security Council in 2005. As a token of gratitude for its political protection, Myanmar agreed to the Chinese pipeline project, rejecting the Indian offer, and also signed a long-term contract for the purchase of military equipment from the Russian Federation.¹⁴ The country was once again convinced of the need to maintain close relations with China, which has demonstrated its readiness to protect Myanmar's economic and political interests.

TWO PIPELINES -ONE ROUTE

Construction of two pipelines began in China and Myanmar, respectively, in September and June 2010. The pipeline and gas pipeline were laid in parallel, and the total investment reached $2.54 billion. Length of the oil pipeline originating on the island

* China Huanqiu Contracting & Engineering Corporation.

** CNPC, SINOPEC, CNOOC.

Map. Chinese energy projects in Myanmar.

Составлена автором по данным: EarthRights International, 2008, China in Burma: Increasing Investment of Chinese MNC's in Burma's Hydropower, Oil & Natural Gas and Mining Sectors - http://www.inter-nationalrivers.org/resources/china-in-burma-increasing-investment-of-chines e-mnc-s-in-burma-s-hydropower-oil-natural

Madei is 771 km long, compared to 1,631 km in China, and has a capacity of 22 million tons per year. A little further from o. Madei begins at the port of Chaupyu on Yanbye Island: its length is 793 km, and in China-1727 km, with a capacity of 12 billion cubic meters. m per year ¹⁵. Both "pipes" pass through the city of Ruili in Yunnan Province and reach the administrative center of Kunming, from which energy resources can be distributed within China, as well as transported to the Republic of Korea.

Gas supply started in July 2013, and in 2015, as mentioned above, the pipeline was put into operation in a test mode. The oil and gas pipeline makes it possible to import energy resources bypassing the Strait of Malacca, which is extremely important for China. However, to date, the pipeline has not been put into permanent operation; a year after the completion of construction, the parties have not announced the start of large-scale oil transportation.¹⁶

In addition to builders from Myanmar and China, companies from South Korea and India took part in laying the Myanmar-China NGP. Soon after the start of the work, numerous cooperation contracts were signed between related companies from different countries working in the field of geological exploration, production of oil and gas production equipment and components for it, etc. China has helped develop infrastructure in the area where the pipeline originates. The parties also put forward a joint initiative to create a special economic zone (SEZ) Chaupyu. This SEZ is the most significant of Myanmar's economic zones. In addition to pipelines, it includes a deep-water port on Madei Island, a well-developed transport infrastructure connecting China with the Indian Ocean-highways, railways and an airport.¹⁷

Table

Myanmar's 30-year hydropower development plan

Source: Chronology of State Development in 1988-2010. Ministry of Information, 2011, p. 471 (in Burmese).

HYDROELECTRIC POTENTIAL OF THE COUNTRY

Despite the fact that Myanmar is rich in water resources, the level of development of hydropower in it is low. The total reserves of the country's hydro resources are estimated at 46 thousand MW18, and less than 2.5% of the total potential is used 19. At the beginning of 2011, the country had 30 power plants with a capacity of 2,255 MW, producing 14,149 million tons of electricity. MWh per year.

Since 2001, Myanmar has been implementing a 30-year plan for the development of hydropower, divided into 6 five - year plans (see Table), which aims to increase electricity production for the needs of the country and for the states of the Greater Mekong region.

Despite this plan, Myanmar today remains a country with a very low level of electrification; most of the population lives without permanent access to electricity at all. In order to solve this problem, the country's government cooperates with foreign countries, among which China is the leader in terms of investment in the Myanmar hydroelectric complex. Since the 1990s, the PRC has been actively cooperating with Myanmar in this area, offering and implementing projects for the construction and rehabilitation of dams, dams and hydroelectric power plants.

China Gejuba Group (hereinafter referred to as CGGC) is particularly active in cooperation with Myanmar. This company is well-known in China - it has built more than 100 hydropower facilities in the country and more than 30 abroad. In Myanmar, CGGC participated in the construction of the Eya hydroelectric power station and the Tasan dam, and supplied equipment for the Papun, Tan Shwe Jin and Tasan hydroelectric power stations at a cost of $14.85 million, 20 million euros and $6 million, respectively.²⁰

In 2006, another Chinese hydropower company, CPIC*, signed a memorandum with the first Ministry of Electricity of Myanmar on the development program for the Meikha, Malikha and Irrawaddy River basins and the construction of the Myishon Dam. In 2007, the company obtained the right to build ⁷ hydroelectric power plants with a total capacity of 13,360 MW21.

Over the past quarter-century, the PRC has participated in 63 hydropower projects in Myanmar, ²² and today imports electricity generated from new hydroelectric power stations.²³ Myanmar also needs electricity, so it is willing to cooperate with Chinese partners. However, a few years ago, the country suspended the implementation of a Chinese project to build a dam-

* China Power Investment Corporation.

new Myeeshon and the construction of a hydroelectric power station that would be one of the twenty largest hydroelectric power stations in the world.

The estimated cost of the Myeeshon hydroelectric power station with a capacity of 6 million kW was estimated at $3.6 billion. The initiator of its construction was Myanmar, but it also subsequently announced the suspension of design work that had already begun. Back in 2006, Prime Minister So Win of Myanmar proposed the idea of constructing a dam and hydroelectric power station to Zhang Xiaol, Vice President of the CPIC Electric Power Investment Company, at the 3rd Expo China-ASEAN. In 2009, the parties signed a framework agreement on cooperation in the development of Myanmar's water resources , and from that moment, in fact, work on the Myishon project began. It was assumed that most of the generated electricity would be exported to China. However, residents of the area surrounding the future flood zone soon protested against the construction of the plant, and in September 2011, President Thein Sein announced a temporary suspension of the design of the giant hydroelectric power station until the end of his presidential term, under the pretext of "respecting the will of the people"^.24

THE FATE OF THE MYEESHON PROJECT

Meanwhile, CPIC has spent a lot of money since it started working on the Myeeshon project - by 2013, the amount of investment reached $1.16 billion. Hundreds of specialists in the field of hydropower, geology, ecology, and the migration service were involved in the work. A detailed work plan was drawn up, and more than 20 studies were completed in the field of soil and water protection, in the field of aquatic and terrestrial ecosystems, on anti-seismic safety, etc., approved by specialists of the Ministry of Energy of Myanmar. The construction of the so-called "feed" power plant was completed, and the creation of storage and working areas in the area of the future Myeishon dam was almost completed. However, the Myanmar Government suddenly stopped further work. Many Chinese specialists were forced to return to their homeland, and more than a thousand pieces of equipment were also taken out. Stopping the construction of Myeeshon caused huge losses not only for the Chinese side, but also for the Myanmar government. Since the Myeeshon project was shut down, Chinese investment in Myanmar has declined markedly.²⁵

Meanwhile, Western countries have expressed their approval of the government's decision. In 2012, the President of the United States B. Obama visited Myanmar and announced $170 million in financial support ²⁶. In the same year, European Commission President J. M. Barroso also visited Myanmar and allocated more than $100 million. ²⁷ In 2013, Japanese Deputy Prime Minister Taro Aso and Prime Minister Shinzo Abe alternately visited the country, after which the cancellation of Myanmar's $1.74 billion public debt was announced, and the country was also granted economic assistance. $ 50 billion in aid yen ($500 million)²⁸. At the same time, a number of Japanese investment companies expressed their desire to do business with Myanmar.

RESULTS AND PROSPECTS

The construction of the Myanmar-China NGP gave an impetus to the development of Myanmar's oil and gas industry, helped meet the electricity needs of a number of industries, and accelerated the process of rapprochement between the two countries. Myanmar started exporting energy resources, thereby contributing to the country's economic growth, and also found a way out of the economic blockade.

For China, the importance of this NGP is also great. First, the energy supply of southwestern Yunnan Province has improved. As you know, the western regions of China are less developed compared to the eastern part of the country, so a new "sip" of hydrocarbons will help and already contributes to the acceleration of the region's economic development. Second, importing oil via the new pipeline will significantly reduce China's dependence on shipping it by sea through the congested Strait of Malacca.

Today, China has signed an agreement with 36 countries on bilateral energy cooperation, among which Myanmar is undoubtedly one of the most important partners. In turn, Myanmar, under the influence of Western sanctions, has strengthened its domestic economic position through large-scale cooperation with China: large gas fields have been discovered in the country, a number of hydroelectric power stations have been built, and many infrastructure projects have been completed. It is difficult to disagree with the opinion of the famous Burmese historian Tan Myint U that "the Burmese economy is now more closely linked to China than at any time in modern history." ²⁹

Nevertheless, today the "energy relations" between the two countries are noticeably declining. This happened after the quasi-civilian government of Thein Sein came to power in 2011 and anti-Chinese sentiment grew in the country shortly afterwards. Meanwhile, Beijing is interested in stability in Myanmar and therefore, despite everything, pursues a friendly policy with the government of the neighboring state, whether it is military, quasi-civilian or civil-democratic.

* * *

Myanmar's military government has been in existence since 1962, more than 50 years, but today the role of the military is noticeably declining. On March 15, 2016, he won the presidential election.-

Krat Thin Kyaw is the country's first civilian president. Such a move towards democracy may lead to the complete lifting of sanctions against Myanmar, which once led to a close rapprochement with China, and may also lead to a reduction in the need for China's political and diplomatic support in the UN Security Council.

Political changes in modern Myanmar, such as the rise to power of the opposition democratic party and the election of a civilian president, will hardly contribute to the active development of "energy relations" between the two countries, and energy projects will be less dependent on political benefits.

Eastern experts such as Li Chenyang and J. Char also speak about the decline of Beijing's role in Myanmar's international relations. They note that in order to optimize cooperation with Myanmar, China is forced to carry out the so-called "recalibration" of bilateral relations: it focuses on cooperation with public and non-governmental organizations in Myanmar, and private media. They call for Chinese firms to be held accountable to the Myanmar population-to learn the local language and culture, and to renegotiate contracts to increase Myanmar's share of profits.³⁰

The role of China in international "energy" relations of Myanmar, in our opinion, has already reached its peak. Joint large-scale energy projects are unlikely to emerge, as the lifting of sanctions on Myanmar will lead to an influx of new Western companies into the country and reduce the level of bilateral "energy relations".

Energy has played a major role in Myanmar-China relations over the past quarter-century. The construction of the NGP indicates a long-term perspective of cooperation, and its use as transit goes beyond bilateral relations: being at the exit to the Indian Ocean, the "wire" is able to transport energy resources brought by tankers from any country in the world, not only from Myanmar, as well as deliver resources to South Korea. Joint hydropower projects contribute to improving electrification and developing the potential of Myanmar's water resources.

^{Vasiliev V. F.} 1 Istoriya Burmymy / Burmy XX vek [History of Myanmar / Burma XX vek]. Moscow, 2010. (Vasilyev V.F. 2010. Istoriya Myanmy / Birmy XX vek. M.) (in Russian)

² BP statistical review of world energy 2015 full report -http://www.bp.com/statisticalreview

³ For more information, see: Lokshin G. M. South China Sea: Islands of Discord / / Asia and Africa Today. 2015, N 9, p. 2. (Lokshyn G. M. 2015. Yuzhno-Kitaiskoe more: Ostrova razdora // Aziya i Afrika Segodnya. N 9) (in Russian)

⁴ Cit. by: Simoniya A. A. Myanmar: transition to a Market Economy (1988 - 2011). Moscow, IV RAS. 2012. (Simoniya A. A. 2012. Myanmar: perehod k rynochnoi ekonomike (1988-2011). Moscow) (in Russian)

⁵ BP statistical review of world energy 2015...

⁶ CIA World Factbook - https://www.cia.gov/library/publications/the-world-factbook/rankorder/2244rank.html

⁷ BP statistical review of world energy 2015...

^{Simoniya A. A.} 8 Decree. Op.

^{Steinberg D.I., Fan H.} 9 Modern China-Myanmar relations. Copenhagen, Nordic Institute of Asian Studies, 2012.

¹⁰ http://www.un.org/russian/news/story.asp7NewsID=8330#.Vw0ANTH79e9

¹¹ http://www.un.org/russian/news/story.asp9NewsID=8660#.Vw0BEDH79e9

¹² http://www.un.org/russian/news/story.asp7NewsID=8330#.Vwt04zH79e8

¹³ http://www.un.org/russian/news/story.asp7NewsID=8392#.Vwt0zTH79e8

^{Simoniya A. A.} 14 Decree. Op.

^{Dai Y., Qin Y.} 15 Zhongmian youqiguandao jianshe yunyingde diyuanzhengzhi jingji fenxi / / Nanya yanjiu jikan (Geopolitical and economic analysis of the operation of the Myanmar-China oil and gas pipeline / / South Asia Research). 2015, No. 1, p. 18.

¹⁶ Negotiations impasse for China oil pipeline - http://www.mmtimes.com/index.php/business/16697-negotiation-impasse-for-china-oil-pipeli ne.html

¹⁷ Myanmar's Special Economic Zones (SEZs) // BNG Legal, 2014.

¹⁸ Tamado Esouya Lathe Naingando Punpyeutoutehmu Khatan 1988-2010 (Chronology of State Development in 1988-2010). Ministry of Information, 2011, p. 471 (in Burmese).

¹⁹ Ibid.

^{Steinberg D.I., Fan H.} 20 Op. cit.

²¹ Ibidem.

²² Ibid.

²³ China in Burma: Increasing Investment of Chinese MNC's in Burma's Hydropower, Oil & Natural Gas and Mining Sectors - http://www.internationalrivers.org/resources/china-in-burma-increasing-investment-of-chines e-mnc-s-in-burma-s-hydropower-oil-natural

²⁴ For more information, see: Simonia A. A. Changes in Myanmar. The first year of Civil Government / / Asia and Africa Today. 2012, N 7, p. 35 (Simoniya A. A. 2012. Peremeny v Myanme. Pervyi god grazhdanskogo pravitelstva // Aziya i Afrika Segodnya. N 7) (in Russian)

²⁵ Jinzi cankaobao, 02.09.2013.

²⁶ http://www.abc.net.au/news/2012 - 11 - 19/an-obama-arrives-in-burma/4379986

²⁷ http://www.bbc.com/news/world-asia-20189448

²⁸ Sinhua, 26.05.2013.

²⁹ Cit. no: Than Myint-U. Where China meets India. Burma & the new crossroads of Asia. London, 2011.

^{Li C., Char J.} 30 China-Myanmar relation since Naypyidaw's political transition: How Beijing can balance short-term interests and long-term values. RSIS Working Paper N 288, S.R. Ajaratnam School Of International Studies. Singapore, 2015.

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