Context: Recently, the Cabinet Committee on Economic Affairs, chaired by the Prime Minister approved an additional investment of US$ 121.27 million by ONGC Videsh Ltd (OVL).

• The investment will be helpful in the development of blocks A-1 and A-3 Blocks of Shwe oil & gas project in Myanmar.

About the Project

• ONGC Videsh Ltd. (OVL) has been associated with exploration and development of the Shwe project in Myanmar since 2002, as part of a consortium of companies from South Korea, India and Myanmar.
• OVL has invested US$ 722 million till 31st March 2019 in this project and the Indian PSU GAIL  is also an investor in this project. 
• The first gas from the Shwe Project was received in July 2013 and plateau production was reached in December 2014. 
• It has been generating positive cash flows since FY 2014-15.
• The participation of Indian PSUs in oil & gas exploration and development projects in neighbouring countries is aligned with India’s Act East Policy and also part of India’s efforts to develop Energy Bridges with its immediate neighbours.

Significance of the project

• It reduces the energy deficit of the country.
• It would also enable much-needed development in India’s North-east region.
• Additional investment in the project will help the block to ramp up production and generate more opportunities for the investors.

Impacts

• The Shwe project has had serious and direct human rights and environmental impacts, including forced relocation, forced labour, and other abuses committed by Myanmar Army battalions providing “security” for the project.

What is Act East policy?

• It began as ‘Look East’ in 1992 transformed into ‘Act East’ in 2014.
• The policy which was originally envisaged as an economic initiative has now gained political, strategic and cultural dimensions including establishment of institutional mechanisms for dialogue and cooperation thereby clearly highlighting the new approach of India. 
• The policy focuses on the extended neighbourhood in the Asia-Pacific region and India has upgraded its relations to a strategic partnership with Indonesia, Vietnam, Malaysia, Japan, Republic of Korea, Australia, Singapore.
• The policy has also placed an emphasis on India-ASEAN cooperation in India’s domestic agenda on infrastructure, manufacturing, trade, skills, urban renewal, smart cities, Make in India etc.
• India is actively engaged in regional initiatives such as Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), Asia Cooperation Dialogue, Mekong Ganga cooperation.
• Objectives- It is aimed at ensuring the overall development of northeastern states in terms of people to people contact, border trade through border haats, cultural ties, infrastructure projects, for example, Kaladan Multi-modal Transit Transport project, India-Myanmar-Thailand Trilateral Highway project, Rhi-Tiddim road project etc.