Burmese Firm Gets South Africa Exploration Right

CAPE TOWN—South Africa has handed an offshore petroleum exploration right to a company reportedly tied to the military junta that has ruled Burma brutally for nearly half a century.

The company, Silver Wave Energy, is pursuing other mineral concessions in South Africa, including access to petroleum deposits off the south coast and diamond and gold resources.

An opposing bid for the same concession was rejected during the same month that President Jacob Zuma received gifts, gems and artwork from Burma's ambassador to South Africa at the time, Tin Oo Lwin.

Two months later, Lwin gave both Zuma and Deputy President Kgalema Motlanthe calendars and sculptures.

Silver Wave is registered in Singapore, but the Mail & Guardian understands a Burmese man, Min Min Aung, owns it. An employee at the company's office in Rangoon confirmed this.

Aung's relationship with Burma's generals is unclear, but it has been widely reported by campaigners and international media that Aung and his company are close to the junta.

Indeed, Silver Wave's history of access to Burma's large petroleum deposits makes it clear that it has a cosy relationship with the regime.

Favoured

The company was one of a handful favoured after the country began to relax its nationalisation policies in 2004. Before that, the state-owned Myanmar Oil and Gas Enterprise (MOGE) was responsible for Burma's exploration and production.

In 2006 and 2007, Silver Wave signed "production-sharing contracts" with Moge for two petroleum blocks there. In the first case it partnered with the Gas Authority of India to explore an area offshore of Burma.

At the time Silver Wave was reported to have been party to investment negotiations between Burma's energy minister and officials from the Russian state of Kalmykia.

Three months later Silver Wave and MOGE signed another production-sharing contract, this time in partnership with Kalmykia, to explore for petroleum in Burma's Hukaung Valley.

Other significant beneficiaries of Burma's petroleum resources include another Russian company and four Chinese companies, three of them state-owned.

Russia, China and South Africa have something else in common besides the Burmese petroleum relations—all three countries voted in 2007 to defeat a draft resolution before the United Nations Security Council calling for Burma to release political prisoners, respect human rights and embrace democracy.

Tugela Basin

The Petroleum Agency of South Africa (PASA) awarded the exploration right to Silver Wave in May this year. The company will use sonar to explore for oil and gas deposits over an 8 000km2 area of the Tugela Basin, offshore of Durban and Richards Bay.

The company had applied for the concession as part of PASA's gazetted 2009 licence round. The only opposing bidder was Pandreco, based in the United Kingdom, which applied for a "technical co-operation permit" instead of an exploration right.

Pandreco's bid was rejected in October 2009.

According to documents the M&G obtained using South African access to information legislation, the bid was rejected because an exploration right application trumped a technical co-operation permit "as it was provided in the bid document".

Silver Wave then completed its environmental management programme, and this was accepted in a record of decision signed by PASA chief executive Mthozami Xiphu in September 2010, paving the way for the award.

Speaking to the M&G, Silver Wave director Lee Kong Lin said: "We own a couple of oil concessions in Australia, Myanmar [Burma] and South Africa."

They also owned a shipyard and a gold mine in Burma, he said.

'Very good relationships'

The company "came to know about the potential in South Africa" through a friend, who Lin declined to name. He said Silver Wave had "very good relationships with the government bodies" in South Africa, but were not "politically involved". He said a "private citizen" owned Silver Wave, but would not disclose the name or nationality.

However, an employee at the company's Rangoon office, whose identity is known to the M&G, confirmed Min Min Aung "is the 100% owner". He added: "We are going to get more blocks in South Africa."

Xiphu denied any political influence in Silver Wave being awarded the exploration right and he said the agency had not been aware of the Burma link.

He confirmed that Silver Wave had "expressed interest in available acreage on our south coast.