Demand for energy is already very high in Myanmar and as investment flows in it will only go up. Please give us your strategic vision of how this demand is to be met.
We are working especially to fulfill the need for electric power, in the sense that we are providing support for the Ministry of Electric Power. Sixty percent of the production of gas, both onshore and offshore, goes to support the Ministry of Electric Power.
We recently awarded 16 blocks to 10 foreign companies. Most of those blocks have enormous potential, especially for gas.
There are 59 companies that are participating in the tender bidding. Most of the world’s giant oil companies are interested in these tender bids. These offshore and deep-sea blocks will be awarded in January. We do not actually have the technology for exploring deep-sea fields, which is one reason why we are inviting international oil companies to come in.
We have already determined the major fields: the Yeregun, Yedana, Shwe and Zawtika gas fields. Zawtika is prepared for first gas in December.
We are also considering unconventional oil and gas sources, such as shale gas. We are inviting oil companies to introduce this technology, especially in the middle part of our country where the geological characteristics seem appropriate. Daewoo is starting a feasibility study of this.
We are also having difficulties with pricing strategies, and the Parliament has stopped the bill to raise the prices. This is also affecting investment. Some of the foreign power companies want to invest in our country, but for a price. They cannot negotiate with a power purchasing agreement, which is not finished yet. We need to reset the price but we are postponing this until the coming financial year.
Most people in major urban areas understand and agree with the pricing strategies. Also people are beginning to understand that hydro is the cheapest way to produce power in our country. All of our hydro projects have been stopped in order to conduct environmental-impact analyses, but the people are beginning to see that this is something that we need. So I think that next year hydro-power project development will commence again, once we have the understanding of the people.
It appears that this government is making a strong effort to communicate more openly with the people about these challenges. Is there a policy of educating and informing the public about the ways to address power shortages?
The Ministry of Electric Power is generating a lot of discussion and making presentations. It seems that the people are appreciating the reality.
Since we met, the first week that we were in the country, we have had interesting discussions with people in the business community. Some people seem to be uncomfortable with the rapid pace of the reforms. What is your perspective from this Ministry?
The reform process began in 2011, as soon as the new government took power. We think that we must be careful not to take it too fast; we cannot be ready for everything at the same time. In particular we are concerned about the lack of infrastructure and need to change the mentality of the people.
First we would like to change the mindset of the people. Of course this is not easy, but the top Ministers are trying to change, the Parliament is changing. However, the people occupying more junior positions are still thinking with the older-mindset. For this reason we need to take time to change them – both in government and in business.
Also, the rules and regulations that we are using in every office need to be changed. We need ten or 15 years, not just 5, and we are pushing forward.
With regard to the financial reform process as it affects the energy sector, are the international companies that you are dealing with comfortable with the financial reforms? Do they have confidence in the system?
Most of the business people that we meet are not comfortable with our current financial system. We still lack infrastructure in that sector. We have no stock market, and without it we cannot privatize our state-owned companies. For 2015 we do plan on having a stock market in place and that will help.
You bring up 2015, in which the AEC will come into existence. What opportunities and challenges lie in the energy sector for regional the economic community?
We will be Chairing ASEAN in 2014. We were actually supposed to Chair ASEAN in 2007 but we were not ready for that responsibility, so now we have been preparing for some time. With regard to the ASEAN economic community, (AEC) the energy sector will need to undergo some changes, such as privatization and corporatization. This is the reason that we are preparing in our Ministry. Others are also preparing by relaxing their regulations, in conjunction with other ASEAN countries. The government sector is really going to experience some difficulties and challenges, although our Ministry is lucky because we are used to working with private and multinational companies and we do not have as many changes to make for this reason. The upstream energy sector is already corporatized. Downstream, such as refineries and fertilizer factories, is what we are in the process of corporatizing currently.
You have been brought in to lead a very prominent Ministry with a lot of international attention. What are some concerns that you have moving forward?
I do not have worries! The Ministries that are responsible for technical concerns have less worries. Our Ministry of Energy is deep, whereas the Ministry of Rail is broad. I am a generalist, not a technician, so I am in place to manage the technical people.
What do you want to accomplish in this chair, in this Ministry, in the next 28 months?
In this business we have upstream, midstream and downstream activities. For the upstream activities, there is not a lot of need for change; it is corporatized and connected to the international business community. For the midstream, or transportation sector, we must make big changes because we are a state-owned enterprise with a lot of people and a large budget. I would like to privatize the midstream level. At the downstream level, or refineries, we have 3 LPG plants, and 5 factories. During my time here I decided to change their management structure from state-owned to JV. We cannot completely privatize yet, but at least we can make a move in that direction.