OPINION: The past week has seen a radical shake-up of Myanmar’s upstream landscape as security forces show no sign of halting their violent crackdown on pro-democracy protesters following February's military coup.
Malaysia’s Petronas has suspended production and declared force majeure at its Yetagun field, after output fell below the technical threshold of the offshore gas processing plant.
A couple of days later, Total chief executive Patrick Pouyanne issued a sweeping statement saying that the French supermajor was pulling the plug on its planned Block A-6 giant offshore gas development and would stop its current drilling campaign in May.
Total will, however, continue producing from its Yadana field, most of the volumes from which are exported to neighbouring Thailand, as was the majority of Yetagun’s gas.
The lion’s share of Myanmar’s offshore gas production is sent via pipeline infrastructure to Thailand and China for power generation.
These neighbours do not want to see imports impacted even if it is due to operators’ political stance amid the deteriorating security issue in Myanmar.
This poses a dilemma for operators, which are under pressure from human rights organisations to stop financing the military junta through taxes from operations.
Although Total will continue producing and exporting Yadana’s gas, it will also donate to associations working towards human rights in Myanmar the equivalent of taxes it would effectively have to pay to the government.
Pouyanne's solution could form a blueprint for how oil and gas companies approach operations in crisis-hit Myanmar.
(This is an Upstream opinion article.)