OPINION: Thailand’s national upstream company PTTEP finds itself between a rock and a hard place when it comes to its Myanmar assets.
Pressure from human rights groups continues against those oil companies which continue to invest in the Southeast Asian nation and, by default, are therefore alleged to be helping to finance the unelected military government.
However, for PTTEP it’s not simply a case of being able to walk away from its producing and under-development fields in Myanmar, even though the financial hit could well be painful.
Parent PTT — the former Petroleum Authority of Thailand — purchases the lion’s share of the exported production from PTTEP’s Zawtika field and the output from TotalEnergies’ Yadana field and the Petronas-operated Yetagun field. PTTEP has non-operated stakes in both Yadana and Yetagun.
Put simply, gas flowing from these three assets offshore Myanmar is key to Thailand’s energy security. Volumes from Yadana and Zawtika are also used in the domestic market where power outages are still commonplace.
PTTEP is therefore seen by many as likely to take the helm of the Yadana asset after supermajors TotalEnergies and Chevron withdraw.
Although the export pipeline infrastructure and gas sales contract are in place, an outside company is unlikely to want to take on these Yadana stakes amid the backdrop of the deteriorating security situation in Myanmar.
The military seized power on 1 February 2021 and since then more than 1500 people have been killed and 12,000 arrested in the junta’s crackdown against anti-coup protesters, according to the Assistance Association of Political Prisoners, a human rights group.
The European Union this week imposed targeted sanctions on state-owned Myanma Oil & Gas Enterprise, which has interests in the nation’s offshore producing fields.
“The European Union is deeply concerned by the continuing escalation of violence in Myanmar and the evolution towards a protracted conflict with regional implications,” the bloc said.
PTT and PTTEP sadly find themselves embroiled in this unfolding drama for no fault on their part other than trying to provide energy security for Thailand.
(This is an Upstream opinion article.)