US embassy cable - 04RANGOON802

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