Senators push for investing in Burmese fossil fuels | The Cable

U.S. senators grilled Derek Mitchell, nominated by President Barack Obama on May 17 as the first U.S. ambassador to Burma in two decades, in a confirmation hearing Wednesday, but they used the session primarily to urge the administration to allow American investment in the country's oil and gas sectors.

Mitchell has served as special coordinator for Burma policy since last year, but democratic reforms and the election of opposition leader and Nobel Peace Prize winner Aung San Suu Kyi to parliament have prompted the Obama administration to step up its diplomatic engagement with the Burmese government.

Although the State Department has proposed a "sector by sector" plan to renewing private sector relations, the White House has not decided if it will lift sanctions on Burma's notoriously opaque and abusive energy industry.

"There's nothing I can say here definitively on this, because it is an ongoing internal, interagency discussion," Mitchell told the Senate Foreign Relations Committee. "But ... we are not looking to exclude any sectors from this."

Senator James Inhofe (R-OK), addressing "rumors" that the administration plans to "exclude oil firms from new rules allowing U.S. investment in the country," argued that such a policy would be detrimental to U.S. companies as foreign firms continue to sign oil and gas exploration agreements with Burma.

"This or any other ?carve-out strategy' would be a strategic mistake," he said. "I believe that U.S. companies including the oil and gas companies can play a positive role in the effort by demonstrating high standards or responsibility, responsible business conduct, and transparency -- including respect for human rights in Burma."

Suu Kyi, on the other hand, is not as optimistic, and cautioned foreign firms against partnering with the state-owned Myanmar Oil and Gas Enterprise earlier this month during a speech in Geneva.

In January, Burma's Energy Ministry estimated its natural gas reserves at 22.5 trillion cubic feet, and the international bidding process for 25 offshore oil and gas blocks is scheduled to take place within two to three months.

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