BURMA'S MOE MYINT LAYS LOW AND PROFITS

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 000361 SIPDIS SIPDIS STATE FOR EAP/MLS; PACOM FOR FPA E.O. 12958: DECL: 09/21/2016 TAGS: ECON PGOV EPET BM SUBJECT: BURMA'S MOE MYINT LAYS LOW AND PROFITS REF: RANGOON 313 RANGOON 00000361 001.2 OF 002 Classified By: Econoff TLManlowe for Reason 1.4 (b,d) ¶1. (SBU) Summary: Moe Myint, a well-connected Burmese business leader, was accustomed to making money while keeping a low profile until he burst into the headlines recently as the head of the only Burmese private company to join the international rush for petroleum reserves beneath Burma's waters. Although the spotlight did not suit him, the public perception of Moe Myint as a wealthy businessman with the right ties is accurate. Moe Myint claims that regime cronies would like to see him fail, so he walks a delicate line of working quietly with international partners, while carefully following the regime's rules. End summary. ¶2. (C) Moe Myint, aka Michael, was born in Rangoon, and is married with two sons, both of whom study in the US. He graduated from the International School in Bangkok and. attended the University of Rangoon and Marshall University in West Virginia. He holds a degree in physics. In 1974, after two years at airline training school, he flew for Myanmar Airways, the national carrier. He trained other pilots and was the personal pilot for former dictator Ne Win. Moe Myint decided to resign from Myanmar Airways in 1987 after, he said, he saw his civil servant colleagues nearing retirement with small pensions and "no hope for the future in their eyes." He rejected generous incentives offered by his supervisors to stay on and has not piloted a plane since. ¶3. (SBU) Capitalizing on his contacts in the airline industry, Moe Myint started in business with an American friend at an airplane equipment export company (reportedly Interaero),which he said was based out of his friend's garage in Malibu, California. In 1989, he returned home at the urging of Burmese colleagues and he founded Myint and Associates Company to supply the oil and gas industry. Again, he tapped old contacts to solicit business, many of them colleagues of his father, a government geologist who was forced to retire in 1962. ¶4. (C) Myint and Associates supplies "anything foreign oil companies need," from catering services to drill bits. His clients include onshore oil companies as well as the operators of Yadana and Yetagun, the two successful fields operating offshore. At one point, Moe Myint ran a catering company with 3,000 employees that imported most of the food it served to meet foreign workers' tastes. He now employs 3,000 people directly, and over 10,000 through subcontracts. His success is due in part to his ability to tap external resources. Moe Myint has hired consultants from the Colorado School of Mines and sends employees overseas to get the latest training. He also maintains his competitiveness with the latest technology: he told us he had spent over $1 million to digitalize the information in his databases, and over $15 million for the latest industry software. Moe Myint makes practical use of expertise gained from his international clients, and served as the Burmese representative of Baker Hughes, FMC Group, Mitsui, McDermott International, Bredo Price International and Shinawatra International. ¶5. (SBU) In 1990, Moe Myint established Myint Petroleum Resources, Ltd, which he registered in the British Virgin Islands, to conduct oil and gas exploration and production at Mahn oil field in Magwe Division. The company entered into a Production Sharing Agreement with Baker Hughes and the government's Myanmar Oil and Gas Enterprise. When Baker Hughes withdrew from Burma, Moe Myint changed the company name to MPRL E & P. Production in Mahn field is difficult RANGOON 00000361 002.2 OF 002 and complicated, he said. Moe Myint told us that foreign visitors were amazed at the level of complexity at his field, and said they had only seen such systems before in textbooks. ¶6. (C) Moe Myint said there are more undiscovered oil reserves onshore, and that he expects to continue to earn revenues from the onshore fields. He claims to have profited well from the $18 million he has invested in the oil and gas sector so far, and is optimistic about the potential for significant reserves from his latest investment in offshore block A-6 (reftel). The A-6 deal reportedly allows MPRL six months to review existing data before it must pay $2 million for exploration rights, with a commitment to invest $33 million in the first four years of development. Moe Myint said that recent finds in the Shwe Fields caused a general reassessment of the geology of Burma's offshore area, and boosted estimates of potential reserves. ¶7. (C) Moe Myint said the broad press coverage that he received when he signed the latest deal embarrassed him. He tries to avoid the spotlight, and said he only granted the interview as a favor to a friend who was retiring from the Myanmar Times weekly. He said he was surprised when the reporter appeared with his editor and a photographer, and again when the wire services picked up and ran the story widely. He chose his words carefully in the interview in order not to offend the regime. Moe Myint told us his careful behavior has allowed him to continue to be successful. He is honest, he claimed, in his dealings with the Internal Revenue Department, and said he is their largest taxpayer. "The cronies are always watching me," he said, "and would like to have the opportunity to bring me down and take over my business, so I am careful not to give them that opportunity." ¶8. (C) To get around international sanctions, Moe Myint said that he conducts his business in Singapore dollars, and asks international clients to purchase their own supplies in US dollars when necessary. He decried the impact that sanctions have had on reducing overseas educational opportunities for Burmese students who are related to regime leaders, some of whom work in his companies. ¶9. (C) Moe Myint is a member of the Burmese OLYMPIC Committee, the President of the Yachting Federation, the Secretary of the Sailing Association and the Chairman of the SIPDIS Sailing Club. His focus is his business, his family, and his sailing. Careful not to offend the regime, he stays out of politics but profits from the current situation, particularly growing interest in the oil and gas sector. His caution was evident when he agreed to only meet in a location that would not attract attention. He claims that he does not agree with the regime's policies, but has no power to influence change. This caution has served Moe Myint and his bottom line well, while the revenue he shares with the regime suits their interests and gives him more freedom to operate than most. STOLTZ