(Adds PTTEP's reaction, Shell)
By Benjamin Mallet and Florence Tan
PARIS, Jan 21 (Reuters) - Oil majors TotalEnergies
and Chevron Corp, partners in a major gas project in
Myanmar, said on Friday they were withdrawing from the country,
citing the worsening humanitarian situation following last
year's coup.
Shell, in its first public acknowledgment of the
move, also said on Friday that it no longer held exploration
licences in Myanmar as of last year.
Myanmar has been in turmoil since the army overthrew the
elected government in February 2021 and detained its leader Aung
San Suu Kyi. The junta has used brutal force https://www.reuters.com/world/asia-pacific/death-toll-since-myanmar-coup-tops-1000-says-activist-group-2021-08-18
to put down protests.
TotalEnergies and Chevron, along with other firms, were part
of a joint venture operating the Yadana gas project off
Myanmar's southwest coast, and the MGTC transportation system
carrying gas from the field to the Myanmar/Thailand border.
They have now become the latest Western companies to decide
to pull out in the wake of the coup.
"The situation, in terms of human rights and more generally
the rule of law, which have kept worsening in Myanmar since the
coup of February 2021, has led us to reassess the situation and
no longer allows TotalEnergies to make a sufficiently positive
contribution in the country," TotalEnergies said in a statement.
"As a result, (it) has decided to initiate the contractual
process of withdrawing from the Yadana field and from MGTC in
Myanmar, both as operator and as shareholder, without any
financial compensation for TotalEnergies."
Since the coup, Myanmar security forces have killed more
than 1,400 people and arrested thousands, local non-governmental
organisation Assistance Association for Political Prisoners
said. The junta disputes the figures.
TotalEnergies did not quantify the financial impact of the
withdrawal, but said Myanmar represented a minor part of its
revenues.
"Financial considerations have never been crucial in this
matter. Our operations in Myanmar amounted to $105 million in
2021, equivalent to less than 1% of the company's income," said
a TotalEnergies spokesperson.
Myanmar amounted to 0.6% of TotalEnergies' total oil and gas
production in that period.
A Chevron spokesperson said: "In light of circumstances in
Myanmar, we have reviewed our interest in the Yadana natural gas
project to enable a planned and orderly transition that will
lead to an exit from the country."
"As a non-operator with a minority interest in the project,
our immediate priority remains the safety and well-being of
employees, safe operations and the supply of much-needed energy
for the people of Myanmar and Thailand."
Total was the biggest shareholder in the project with a
31.24% stake, while Chevron holds 28%. PTTEP, a unit of Thai
national energy company PTT, and Myanmar state-owned oil and gas
group Myanmar Oil and Gas Enterprise (MOGE) hold the remainder.
Shell, an equity holder in offshore Block A7 with
partners Woodside Energy and Myanmar Petroleum Exploration and
Production Co, said it had relinquished its exploration licences
in Myanmar last year.
"Exploration blocks have been relinquished, therefore there
is no production, revenue nor related payment to government," a
spokesperson told Reuters.
SANCTIONS?
Rights groups welcomed TotalEnergies' move and said more
companies - and sanctions https://www.reuters.com/business/media-telecom/un-rights-chief-urges-asean-move-myanmar-dialogue-2021-07-07
on Myanmar's oil and gas - should follow.
"TotalEnergies has finally taken heed of the calls of
Myanmar people, local and international civil society to stop
the flow of funds to the terrorist junta," said Yadanar Maung, a
spokesperson for activist group Justice for Myanmar.
"It is now essential that international governments move
ahead with targeted sanctions on oil and gas to deny the junta
funds from the remaining oil and gas projects."
TotalEnergies said that before deciding to pull out of
Myanmar, it had approached French authorities to consider
putting in place targeted sanctions that would confine financial
flows to escrow accounts without shutting down gas production.
"TotalEnergies has not identified any means for doing so,"
it said.
Total and Chevron last year suspended some payments from the
project that would have reached the junta, earning some praise
from pro-democracy activists.
The group said it had notified its partners in Myanmar of
its withdrawal, which will become effective at the latest at the
expiry of a 6-month contractual period.
Located in the Gulf of Martaban, the Yadana field produces
around 6 billion cubic metres per year of gas, about 30% of
which is supplied to MOGE for domestic use and 70% exported to
Thailand.
"This gas helps to provide about half of the electricity in
the Burmese capital Yangoon and supplies the western part of
Thailand," TotalEnergies said.
A spokesperson for TotalEnergies said PTT would be a
'natural' choice for its Myanmar assets, adding it was already
in contact with the company over this. PTT unit PTTEP said it
was "carefully considering" what to do next.
The military-run Myanmar government did not immediately
respond to a request for comment. MOGE officials declined to
comment.
TotalEnergies told Reuters the withdrawal process did not
require the approval of Myanmar authorities.
(Reporting by Sudip Kar-Gupta, Benjamin Mallet in Paris,
Florence Tan in Singapore and Chayut Setboonsarng in Bagkok;
Writing by Ingrid Melander; Editing by David Goodman and Jan
Harvey)
