KHIN NYUNT MEETS UNOCAL

C O N F I D E N T I A L RANGOON 000802

SIPDIS

STATE FOR EAP/BCLTV, EB
COMMERCE FOR ITA JEAN KELLY

E.O. 12958: DECL: 06/23/2014
TAGS: ENRG PGOV BM
SUBJECT: KHIN NYUNT MEETS UNOCAL

REF: A. RANGOON 728

B. BANGKOK 3954

Classified By: COM CARMEN MARTINEZ FOR REASONS 1.4 (B,D)


1. (C) Summary: Bangkok-based representatives of Unocal were
in Burma to introduce a new regional chief. While paying a
courtesy call on PM General Khin Nyunt, the Unocal reps heard
upbeat talk of Burma's energy sector and of Burma-Thai
relations. The PM also made vague promises of a release of
ASSK and of NLD participation in the ongoing National
Convention. We suspect the PM was not giving Unocal the
straight scoop on these topics, though it's always possible
he's seeing matters far differently than we. End summary.

Gas Development: Pie in the Sky


2. (SBU) Representatives of Unocal paid a courtesy call on
Prime Minister General Khin Nyunt on June 17th. The reps,
based in Bangkok, were in town to introduce a new regional
manager who will assume responsibilities for Unocal's stake
in an offshore gas project -- Yadana. According to one of
the Unocal officials, at the meeting, the PM also raised the
issue of new natural gas developments off the west coast of
Burma. The GOB and the developers of these "finds," Korean
firms Daewoo and Korea Gas and Indian companies the Oil and
Natural Gas Commission and the Gas Authority of India, are
touting enormous reserves of more than 14 trillion cubic feet
(tcf). (Note: By comparison, the two gas fields currently
being exploited by international consortia, and which
generate around $300 million per year for the GOB, reportedly
have 9.7 tcf in proven reserves. End note.) However, other
energy sector sources have cast doubt on this claim as
premature at best. Only two test wells have been drilled,
the first a dry hole. More test drilling is ostensibly
scheduled for this fall.


3. (SBU) The PM told Unocal that the GOB, presumably with
international assistance, plans to build an LNG plant within
the next 2-3 years. Currently the GOB is backing the idea of
a liquefied natural gas (LNG) plant, vice a pipeline through
Bangladesh, as the best method of exporting the gas to India.
According to Unocal this plan is still very far fetched
since the viability of the site has not yet been established,
let alone at the volume necessary to justify the construction
of a multibillion dollar plant.

Thaksin: Burma's Best Friend


4. (C) The PM then turned to the issue of Burma-Thai
relations. Oddly, and contrary to the reports of the RTG
(ref B),General Khin Nyunt was quite positive, saying that
bilateral relations were at a high point because of the
constructive attitude of Thai PM Thaksin.


5. (C) Finally, Unocal reportedly urged the PM to allow all
parties, including the NLD, into the National Convention (NC)
and to release all political prisoners. Khin Nyunt implied
that GOB was intending to release ASSK but that timing was
undecided. He also said there was still a chance for the NLD
to join the month-old NC -- at variance with comments from
the Deputy Foreign Minister two weeks back (ref A). The PM
also noted the SPDC was still hopeful on reaching a written
cease-fire with the last remaining major insurgent group, the
Karen National Union (KNU).

Khin Nyunt: Deluded or Lying?


6. (C) Comment: Unocal has always proven to be a useful
interlocutor, as it has regular and cordial contact with
senior GOB officials. From Unocal's report of Khin Nyunt's
comments on key economic and political matters, it's clear
that the PM is either: lying, deluded, or thinking wishfully.
We suspect the third on the gas reserves, and the first on
the Thai relationship and the NLD's NC participation. End
summary.
Martinez