Woodside Petroleum has decided to withdraw from Myanmar due to the deteriorating human rights situation in the Southeast Asian country, and hence will turn its back on the large Block A-6 gas development.
The Australian company has operated in Myanmar since 2013, conducting multiple offshore exploration and drilling campaigns, and making a number of discoveries including Shwe Yee Htun, Pyi Thit and Pyi Tharyar in Block A-6 and Aung Siddhi in Block AD-1.
Woodside holds a 40% interest in Block A-6 and interests in blocks AD-1 and AD-8.
The company had previously said it was reviewing its Myanmar business following the state of emergency declared in February 2021 and the deteriorating human rights situation in the country.
Chief executive Meg O’Neill said while Woodside had hoped to develop the A-6 gas resources with its joint venture participants, and deliver much-needed energy to the Myanmar people, there was no longer a viable option for Woodside to continue its activities.
“Woodside has been a responsible foreign investor in Myanmar since 2013 with our conduct guided by the UN Guiding Principles on Business & Human Rights and other relevant international standards,” she said.
“Given the ongoing situation in Myanmar we can no longer contemplate Woodside’s participation in the development of the A-6 gas resources, nor other future activities in-country.”
Woodside will now commence arrangements to formally exit blocks AD-1 and AD-8, the A-6 joint venture and the A-6 production sharing contract held with the Myanma Oil & Gas Enterprise.
The non-cash expense associated with the decision to withdraw from blocks A-6 and AD-1 is expected to impact 2021 net profit after tax by US$138 million.
This is in addition to the US$71 million exploration and evaluation expense for Block AD-7 disclosed in Woodside’s fourth quarter report on 20 January 2022.
These costs will be excluded from underlying net profit for the purposes of calculating the dividend.
In 2021, Woodside completed the relinquishment of exploration permits covering offshore blocks AD-2, AD-5 and A-4 and is in the process of withdrawing from blocks AD-6, AD-7 and A-7.
French energy major TotalEnergies, which is Woodside’s joint venture partner in Block A-6, announced last week it would be exiting Myanmar, while Chevron is also planning to depart.