They were partners in the Yadana gas field. It was a pressing request from human rights NGOs as the country remains in chaos.
The French giant TotalEnergies and the American juggernaut Chevron announced on Friday their withdrawal from Burma where they were partners in the Yadana gas field, a pressing demand from human rights NGOs following the military coup.
A year after the February 1, 2021 putsch that overthrew Aung San Suu Kyi and ended a 10-year democratic parenthesis, the country remains plunged into chaos. But foreign companies that have left Burma remain rare despite the appeal of NGOs in the face of the bloody repression of the protest and the warnings of experts. “The ever-deteriorating human rights context in Myanmar (…) has led us to reassess the situation“, explained the French group in a press release.
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Chevron followed suit: “we have reassessed our interest in the Yadana natural gas project to allow for a planned and orderly transition that will lead to a withdrawal from the country“Said a spokesman for the American major, Cameron Van Ast.
The process of withdrawal from the Yadana field and the MGTC transport company has been initiated “without any financial consideration for TotalEnergies“, according to the group, established since 1992 in the country in the gas sector alone, where it employs more than 200 people.
“Toxic” environment
The withdrawal will be effective in six months and the interests of TotalEnergies and the operations of the field will be divided between the remaining partners. TotalEnergies is a partner (31.24%) and operator of the Yadana field alongside Chevron (28.26%), PTTEP (25.5%), a subsidiary of the Thai national energy company, and the company state MOGE (15%), controlled by the army. This decision “reflects how toxic Burma has become as an environment for investing“, commented to AFP Richard Horsey, of the International Crisis Group.
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But the absence of financial compensation for the French group implies that “the other partners, including the regime, will have a cash flow in the form of a larger share in the project“, he warns. The “shadow government“formed in reaction to the coup hailed”a strong message sent to the military“. “Cutting the junta’s economic income is paramount to destroying the regime. Other companies must follow Total’s examplesaid its Minister for Women and Youth Naw Susanna Hla Hla Soe.
A few rare foreign companies had already packed up, including the Norwegian telecoms group Telenor, the British tobacco company BAT and the French renewable energy producer Voltalia. Others, like EDF, had suspended their activity or their orders (H&M, Benetton). TotalEnergies had already put an end to the development project for a new field, stopped its drilling campaigns and suspended payments to shareholders of a gas pipeline.
Dry up the income of the junta
The French group had paid around $176 million to the Burmese authorities in 2020, in the form of taxes and “production rights“. Human Rights Watch says natural gas projects are the country’s main source of foreign exchange earnings, amounting to more than $1 billion a year. The offshore Yadana field produces around 6 billion cubic meters of gas per year, of which around 70% is exported to Thailand and 30% supplied to MOGE.
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The PTTEP said in a statement that it had taken note of Total’s decision and attached the greatest importance to the “energy security of Thailand and Burma“. TotalEnergies has hitherto invoked the impossibility of “deprive Burmese and Thai people of electricityand had pledged in return for the taxes paid to fund human rights NGOs.
In a letter to Human Rights Watch earlier this week, TotalEnergies CEO Patrick Pouyanné said he “there is no financial flow between TotalEnergies and MOGE“. “The domestic gas is delivered to MOGE and recorded as paid +in kind+ by TotalEnergies and is subject to compensation on export revenues“, he explained. The NGO, welcomed the decision of TotalEnergies, adding that foreign governments will not have “no more excuses to delay the imposition of targeted sanctions on the country’s gas and oil entities“.