Myanmar’s bidding round: quick win for transparency within reach

Last week Myanmar’s Ministry of Energy announced the long awaited results of the bidding round for rights to develop the country’s oil and gas resources. After decades of watching from afar, several major international oil companies, - many of them longstanding EITI supporters, including BG, Chevron, Shell and Statoil  - now look set to enter the country, a testament to that the government appears to be moving in the right direction with its reforms and commitment to more openness.

EITI is a central part of the reforms aimed at improving the governance of Myanmar’s extractive sector, which has for long been operating in the dark. In his address to the Parliament last week, taking stock of the government’s achievements after three years in office, President Thein Sein reaffirmed his support for the EITI stating that “our Government is also endeavoring to become a member to the EITI which shows its commitment to encourage responsible investments”.

As EITI stakeholders in Myanmar are putting the final touches to the EITI candidature application, this commitment to transparency will soon convert to practice.  Transparency of license allocations is one of the aspects that the government and the MEITI multi-stakeholder group will have to address as part of the implementation of the EITI Standard.  The EITI requires that implementing countries disclose information related to the award of licenses, including a description of the process for allocating licenses, the bid criteria, the list of applicants, information about the recipients of the licenses awarded, and any significant deviations from the applicable legal and regulatory framework that set out how licenses ought to be awarded.  In addition, the EITI encourages public disclosure of the contractual terms.

While there is still some time until Myanmar would have to comply with this EITI requirement, there is little doubt that investors and citizens will scrutinize how the government is now selling off its natural resources. Some early transparency around the bidding round and its outcomes, for example by publishing how the recent oil and gas blocks were awarded, could increase public confidence in that the oil and gas resources will be developed by companies that have the best technical and financial expertise, and that the people of Myanmar will receive a fair return. It would also be a quick win for the government and the MEITI MSG in terms of delivering on their EITI commitments.

Dyveke Rogan
Regional Director, EITI International Secretariat