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U.S. Department of State

Diplomacy in Action

Energy Diplomacy in the 21st Century


Remarks
Robert F. Cekuta
Principal Deputy Assistant Secretary, Bureau of Energy Resources
Offshore Technology Conference
Houston, TX
May 9, 2013

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Mr. Minister Aung,  let me first of all welcome you to the United States.

Let me begin by thanking the Offshore Technology Conference and the U.S. Department of Commerce for organizing this event and for offering this opportunity to discuss our perspectives on the importance of the oil and gas sector in Myanmar, as well as U.S. engagements in this area. We are all here because we share a sense of the tremendous potential in the region; we all sense the opportunity to turn the corner in a lasting and responsible manner.

President Obama’s historic trip in November highlighted the continued progress Myanmar is making on key reforms, including with regard to human rights. The United States Government is working hard to support President Thein Sein, others in his government, and all those looking to help the country as it continues down the path of democratic reform. A vital element of these reforms will be to strengthen and modernize the country's management of its natural resources, in particular within the oil and gas sector. We continue to work closely with the government to identify where we can be of assistance in helping Myanmar reach the ultimate goal of creating a transparent, well-managed energy sector that can attract the many responsible, highly regarded oil and gas companies that are represented here in this room.

Turning particularly to U.S. oil and gas companies -- we are certain that, given all of your expertise and capabilities, you have proven around the world that your participation will set a model for responsible investment and business operations as well as contribute to further reform and promote economic development and contribute to the welfare of the people. The U.S. government is dedicated to doing everything it can to work with you to encourage and support responsible investment. We want U.S. companies to invest and to do so in a socially and environmentally responsible manner that can serve as a model for others and benefit all of the people in the community. With that said, we have paired our actions to ease sanctions with putting in place reporting requirements for U.S. companies that encourage responsible investing, including with regard to promoting transparency and respect for human and labor rights, as well as supporting sound environmental practices, and land use.

Although the country has one of the world’s oldest oil sectors, with production stretching back into the mid-1800s, it also contains sizable undiscovered oil and gas resources and production potential, particularly in the deep water. The opportunities for potentially massive additional revenue from these resources are very promising, but we have to recognize instances of conflict and human rights abuses associated with the extractive industries make sound energy sector governance and transparency a priority for our bilateral engagement.

In order to help shape the deepwater licensing round now underway, last December the State Department, under the auspices of our Energy Bureau’s Energy Governance and Capacity Initiative (EGCI) hosted the Ministers of Energy and of Mines, as well as the Managing Director of the state-owned hydrocarbon company, MOGE, in New Orleans and in Washington to talk about the country's government's plans and about best practices in transparent oil and gas sector licensing and to witness an offshore lease sale for the Gulf of Mexico. The Energy Governance and Capacity Initiative has been a tool used with a number of countries around the world to provide targeted help on particular matters pertaining with how governments deal with particular legal, regulatory, or other matters in overseeing their oil and gas sectors.

The trip was very well received and we hope that some of the practices and ideas observed and discussed here in the United States will prove useful and make their way into the licensing practices underway now. This was not a one-off event, and we will continue to engage with the government under our EGCI program. Moving forward we look to engage with the Ministry of Energy and MOGE on legal reforms, sector management, and financial accountability processes.

There are of course many ongoing international efforts to enhance transparency and strengthen energy governance within the country, and we make every effort to have our efforts complement those broader international programs. The most prominent example is the Extractive Industries Transparency Initiative (EITI). We support and encourage the country’s progress towards EITI implementation, and are encouraged that they plan to send a large, high level delegation to the EITI Global Conference in Sydney in May. (And let me add a note here that as a member of the EITI's Board, I particularly hope we will have a chance to talk further in Sydney with your country's delegation.)

Energy relations between our two governments will not, and should not, be limited to the oil and gas sector. Indeed, the oil and gas sector should not and cannot be isolated from the larger energy sector in the country. As protests in Rangoon made clear last year, the expectation of citizens that their government will provide electricity to a greater portion of the country is of paramount importance. The country has Asia’s lowest electrification rate at only 27 percent. Its significant gas resources can help meet growing demand, but the country currently lacks the legal, regulatory, and physical infrastructure to utilize effectively and to optimize this resource. The U.S. government, therefore, is working with the World Bank and the Asian Development Bank to develop power sector and rural electrification investment plans, in coordination with the UN’s Sustainable Energy for All initiative. It is our profound hope that the gas that your companies will find and develop will not only make your investments worthwhile, but will also help power a more inclusive and self-sustaining electrical power grid within the country

The State Department and Embassy are here to assist and partner with the country in order to act upon the new and exciting opportunities that are being generated through the ongoing political and economic reforms.

Governments, the private sector, and most importantly the people will benefit from sound, sustainable development of the country's hydrocarbon resources. In the complex and new environment before us, it is critically important that we think how best to partner to ensure stability and help achieve prosperity in the years to come. U.S. investors, producers, supply companies come with unmatched experience, technological know-how, creativity and drive; they come with a record of achievement and success in dealing with challenges in the energy sector around the world. They are interested in bringing this experience, this expertise, this spirit to help Myanmar and its people capture the benefits of the country's resources. There are great opportunities for mutual benefit, and I know the U.S. companies here will do their due diligence and invest responsibly for the prosperity of all of the people, restoring the country to its traditional role at the crossroads between East and South Asia.

Thank you.



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