TotalEnergies and Chevron are pulling out of their lucrative gas project in Myanmar, citing deteriorating human rights in the country following last year’s military coup.
This decision is a hammer blow for the regime which overthrew a democratically elected government on February 1 last year.
Since then, the military has launched a fierce crackdown on activists, anti-junta protesters and journalists that has killed more than 1,400 people and seen an escalation in violent attacks on ethnic minority areas, according to Human Rights Watch
Revenue from the Yadana offshore gas project of TotalEnergies and Chevron is the biggest contributor to the state coffers. Their withdrawal is extremely important and now threatens to destabilize the regime.
In 2019, TotalEnergies said it paid Myanmar 229.6 million euros ($257 million) in taxes and the government’s share of its gas production.
In his declaration, TotalEnergies recognized the deteriorating living conditions of the people of Myanmar.
“(It) has caused us to reassess the situation and no longer allows TotalEnergies to make a sufficiently positive contribution in the country. Consequently, TotalEnergies has decided to initiate the contractual withdrawal process from the Yadana field.
The company also referred to concerted pressure from hundreds of campaign groups demanding that international gas producers stop sending revenue to the government through the state-owned Myanmar Oil and Gas Exploration Company ( MOG).
The decision was welcomed by campaign group Justice for Myanmar, which said: “It is now essential that governments move forward with targeted oil and gas sanctions to deprive the junta of oil project funds. and remaining gas.
“TotalEnergies must now ensure that they exit responsibly in a way that mitigates the negative human rights impacts on people in Myanmar during the process of their exit.”
The withdrawal of Chevron and TotalEnergies does not necessarily mean that the gas supply will stop at Yadana. The French company is giving six months’ notice to the remaining partners, including PTTEP, a subsidiary of Thailand’s national energy company, and MOGE, who will have to find another extractive industry company to step in or operate the project themselves.
Last night TotalEnergies confirmed that it had discussions with US and French authorities about introducing sanctions to prevent gas revenues from reaching the MOGE.
The energy giant’s managing director, Patrick Pouyanné, said: “We have formally requested the French Ministry of Foreign Affairs that these sanctions can be put in place with a view to putting in place a legal framework to respond to calls asking us to stop the financial flows resulting from the production of the Yadana field to MOGE, the national company of Myanmar.
TotalEnergies now believes that money from its Yadana project should be held in what is called an “arm’s length” escrow account, beyond the reach of Myanmar generals who have controlled the country since the coup. from last year. This position is what activists were demanding following the coup.
In total, gas revenues provide the putschist regime with an estimate $1 billion per year in vital hard currency he needs to pay for imports such as weapons and fuel.
“All foreign exchange spending needs are covered by mining, oil and gas revenues,” a former adviser to Myanmar’s finance ministry told Finance Uncovered and Myanmar Now earlier this month.
Since July 2019, Finance Uncovered has been working with Justice for Myanmar on investigations of international companies that have numerous relationships with military-owned companies. These are largely companies in the extractive industry, telecoms and real estate.
Our articles have been published in Le Monde, Suddeutsche Zeitung, the New York Times and many international media.
And after the coup, Finance Uncovered produced a series of articles with Myanmar Now, an independent media outlet.
Economists say blocking the flow of gas revenues, as well as preventing the generals from accessing Myanmar’s multi-billion dollar foreign reserves, would have a significant financial effect on the junta.
It is unclear, however, whether this would force the generals to the negotiating table or cause them to become even more intransigent.