Australia’s Woodside Petroleum is halting exploration in Myanmar and reconsidering its plans for the planned A-6 offshore gas development there as unrest deepens following the 1 February military coup.
Woodside confirmed its scaling back its workforce in Myanmar as the security situation deteriorates after the junta snatched power, with the operator saying reports of violence against pro-democracy locals protesting peacefully “are deeply distressing”.
“We are reducing our presence in country and expect full demobilisation of our offshore exploration drilling team over the coming weeks,” Woodside said on Saturday.
The company was engaged in a three-well exploration campaign on deep-water blocks A-7, AD-1 and AD-8 offshore Myanmar on behalf of partners Shell and China National Petroleum Corporation, with the initial wildcat spudded in January.
Woodside clarified to Upstream that the exploration programme, which is being performed by Transocean’s drillship Dhirubhai Deepwater KG2, would be completed as planned before the operator demobilises its drilling team.
Transocean's February fleet status report shows the Dhirubhai Deepwater KG2 on a US$250,000 dayrate charter with Woodside offshore Myanmar until April with a fixed price option to extend that contract until August 2021.
Meanwhile, Woodside said it would keep all business decisions under review until it sees the outlook for Myanmar and its political stability has improved.
That puts a question mark over the planned Block A-6 ultra-deepwater gas project that it was progressing with co-venturers Total and MPRL.
“Work continues to progress the commercial, marketing and technical workstreams for Myanmar A-6... we are targeting front-end engineering [and] design entry in 2021,” Woodside said last October.
The company does not have any producing assets in Myanmar, nor does it currently generate any revenue in Myanmar.
Woodside on Saturday added that it does not have any direct commercial arrangements “with any Tatmadaw-connected organisations”.
Myanmar currently receives around US$1 billion annually in revenues from producing gas fields including Total’s Yadana, Yetagun – which is operated by Petronas, PTTEP’s Zawtika and the Posco-operated Shwe. The lion’s share of output from these four offshore projects is exported to neighbours Thailand and China.
“All commercial relationships with the Myanmar military and entities they own or control must end, as recommended by the UN fact-finding mission,” said a statement from Justice for Myanmar (JFM), a covert group of activists dedicated to improving the lives of all the people of Myanmar.
“Financing the Myanmar military exacerbates the brutal and violent crimes that are being inflicted on peaceful protesters as they stand firm and united in defiance of the Myanmar military to restore democracy, through a federal system with the military under civilian control.
JFM earlier this month urged all businesses with commercial links to state-owned (NOC) Myanma Oil & Gas Enterprise, through which payments from international operators the government are funnelled, to immediately cut those ties.
“If it’s business as usual, foreign investors in Myanmar’s gas [industry] will be funding an illegitimate and brutal military regime as they did before 2011, when the country was under full military rule,” said JFM.
Woodside stressed that it condemns human rights violations, saying it had watched with growing concern the situation on the ground since the military coup.
“We support the people of Myanmar and we hope to see a peaceful journey to democracy,” said the Australian energy player.
“As a responsible foreign investor in Myanmar since 2013, our conduct is guided by the UN Guiding Principles on Business and Human Rights and other relevant international standards.
“We will continue to work with industry partners and stakeholders to foster a business environment that respects human rights and supports progress towards openness and democracy in Myanmar.”
This weekend saw the junta fire Myanmar’s UN Ambassador Kyaw Moe Tun one day after he urged in an emotional address that the United Nations use "any means necessary" to reverse the coup.
Myanmar state television on Saturday announced that Kyaw Moe Tun had been sacked for "betraying the country" and "abusing the power and responsibilities of an ambassador".
Updated to include Woodside's clarification regarding the status of its drilling campaign.