Ministry of Energy Signs Oil, Gas Exploration Contracts
Two regional subsidiaries, Singapore-registered Statoil Myanmar Private Ltd and Conoco Phillips Myanmar E&P Pte agreed to invest $323 million in oil and gas exploration in Myanmar’s western Rakhine coast. Under the contracts, production-sharing agreements would span eight years. The companies will frstly have to undertake environmental impact studies and then will continue forward. During the last fnancial year that year ended on March 31, the Southeast Asian nation signed multiple contracts with many multinational energy frms. Myanmar signed exploration contracts with various companies such as Shell, BG Group, Woodside, Chevron, and Eni. The country also attracted foreign direct investment in total $8 billion last fscal year, of which more than 35 percent was generated by the energy sector.
Myanmar Investment Commission to Empower State Authorities
Myanmar Investment Law will be amended to allow Myanmar Investment Commission to delegate power to regional authorities. The purpose is to share the authority with regional governments. The Myanmar Citizen Investment Law will also be amended to allow regional governments to approve domestic investments, depending on the type of business, whether it will create job opportunities or help to develop the region. Under the current Foreign Investment Law, foreign companies are not permitted to invest within 10 miles (16 kilo meters) from the country’s borders to prevent security risks.
MIC had originally hoped to pass two key pieces of legislation in this session; the new Myanmar Investment Law which will combine the Foreign Investment Law and the Myanmar Citizens Investment Law, and a revision of the Myanmar Companies Act.
High Representative of EU Praised Aung San Su Kyi
Federica Mogherini, High Representative for Foreign Affairs and Security Policy and Vice-President of the European Commission, called, in the morning of November 16, Aung San Suu Kyi, chairperson of the National League for Democracy (NLD) in Myanmar, to congratulate her on her election victory.
During the call, Ms. Mogherini welcomed the early initiatives undertaken by Aung San Suu Kyi for dialogue in a spirit of national unity and reconciliation. She highlighted that it is now important for all parties to accept the election results, as it is crucial to work towards a peaceful transition through dialogue and reconciliation. Federica Mogherini and Aung San Suu Kyi agreed to keep in contact along this process in the coming months. She also underlined the commitment of the EU, as a long-time partner of Myanmar, to support the transition.
Revocation of Foreign Exchange Licenses to Stabilize Myanmar Kyat
The Central Bank of Myanmar (CBM) announced that it will be revoking of foreign exchange licenses to promote the Kyat, which has depreciated by about 25% against the U.S dollar this year, a direct result of a strengthening US dollar and Myanmar’s widening budget defcit. CBM is aiming at reducing dollarization, to have more widespread usage of Kyat and more debit and credit card payments in local currency. It also hopes the new policy will prevent more widespread use of the U.S dollar in the domestic economy, particularly within the tourism industry and encourage use of the country’s struggling local currency.
Since 2011, Myanmar government has permitted foreign exchange and non- banking businesses to deal in foreign exchange through foreign Exchange Management Law. On May 2015, the Central bank halved US dollar withdrawal limits in light of growing concerts over depreciation of the Kyat. Under new policy announcement on October 16, banks and non-bank money changers will still be permitted to exchange foreign currencies, but other business that accept US dollar payments such as hospitality and tourism companies, airlines, duty free shops, freight forwarders, restaurants, tour companies, other private businesses and supermarkets, among others, must return their licenses by the end of November and will no longer be able to transact in US dollar.
