Oil and gas companies with assets in restive producer nation Myanmar have responded to growing calls from human rights groups for them to pull the plug on any ties with the military junta that seized power in a shock February coup.
Pro-democracy groups have argued that revenuess from producing gas fields are finding their way into the military’s coffers and they are urging industry players to place funds into escrow accounts while the Myanmar army (Tatmadaw) remains in power.
Posco International, which operates the producing Shwe gas project, told Upstream that under its contract with the Ministry of Electricity & Energy and Myanma Oil & Gas Enterprise (MOGE), its Shwe business “has been operating for the last 20 years regardless of the political party that takes the reins of government”.
Profits and dividends from the offshore gas fields’ development in blocks A-1 and A-3 is distributed to the Shwe partners on a pro rata basis.
“Profit coming from the Shwe project for MOGE is directly sent to MFTB (Myanmar Foreign Trade Bank) under the Myanmar government, not the military regime,” a spokesperson for South Korea’s Posco International told Upstream.
US supermajor Chevron, which is a co-venturer in Total’s Yadana gas field offshore Myanmar and related pipeline infrastructure, said it did not “direct nor control” payments of export revenues to MOGE, the national oil and gas company that is now under de facto control of the military junta.
“Each Yadana joint venture partner, including MOGE, receives their share separately. MOGE also receives an in-kind distribution in natural gas, which cannot be physically placed in escrow,” a Chevron spokesperson told Upstream.
Chevron’s local subsidiary, Unocal Myanmar Offshore Company, “does not participate in MOGE’s onward distribution of this gas and we do not make distributions of gas directly to the military”, the spokesperson added.
Meanwhile, Woodside's departing chief executive Peter Coleman on Thursday said the Australian company “does do not have any direct commercial arrangements with any Tatmadaw-connected organisations" and currently has no producing assets in Myanmar.
Woodside operates and is a partner in several blocks offshore Myanmar and had been driving exploration and appraisal efforts at Block A-6 where Total was stepping into the role of operator for a planned ultra-deepwater gas fields development.
The intention of moving into the front-end engineering and design phase in 2021 is now off the table following the 1 February military coup.
Business decisions under review
“Until we see the outlook for Myanmar and its political stability has improved, we will keep all business decisions under review,” said Coleman.
“We have demobilised and repatriated all non-Myanmar personnel and ceased all exploration activities in country. We continue to provide support to our employees who are Myanmar nationals. Their safety is of paramount importance to us,” he added.
Coleman noted that Woodside had started activities in the Southeast Asian nation in 2013 “at a time when there was optimism about transition to a stable democracy”.
“The events of recent months are deeply distressing. We condemn the violence and the human rights violations,” said Coleman.
The Chevron spokesperson also told Upstream that the company is saddened by the tragic loss of life throughout the country, and it condemns the human rights abuses in Myanmar.
“We support the people of Myanmar on their journey to a modern, peaceful and prosperous democracy and stand with the global community in urging for a peaceful resolution that respects the will of the people,” the Chevron spokesperson said.
Gas from the Shwe field is exported via pipeline infrastructure to China, while most of the volumes from the Yadana project flow via pipeline to another neighbour Thailand.
Chevron said it is supporting Yadana operator Total in maintaining critical energy supplies to the people of Myanmar and Thailand “during a crisis and pandemic”.
Gas from Yadana provides around 50% of all electricity consumed in Myanmar’s largest city Yangon, which Chevron said is “crucial for homes, schools, hospitals and access to telecoms”.
“Additionally, gas from Yadana also represents about 14% of Thailand’s gas supply, accounting for around 8% of its electricity generation,” added the Chevron spokesperson.
“Overall, gas supplied by all projects in Myanmar accounts for approximately 14% of Thailand’s electricity supply.”
The operators’ comments come as the Global Movement for Myanmar Democracy (GM4MD) revealed it is organising an Earth Day campaign to bring awareness as to how Myanmar's democratic movement is linked to the global climate movement.
Bankrolling the military
“Holding multinational corporations accountable, advocating for environmental sustainability and sanctity of life are central to Myanmar’s pro-democracy movements,” GM4MD told Upstream.
GM4MD represents “hundreds of thousands of individuals from the Myanmar diaspora and friends of Myanmar organised into a global community to fight for Myanmar’s democracy”.
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