TotalEnergies withdraws from Myanmar on worsening human rights situation

Paris-based oil and gas company TotalEnergies said Jan. 21 that it has decided to fully withdraw from the Yadana field and Moattama Gas Transportation Co Ltd in Myanmar after reassessing the worsening human rights situation in the Southeast Asian country following a coup in February 2021.

TotalEnergies said it has initiated the contractual process for withdrawal from the assets both as operator and as shareholder, without any financial compensation, and its partners had been notified. The withdrawal "will be effective at the latest at the expiry of the 6-month contractual period," it said.

"The agreements also stipulate that, in the event of withdrawal, TotalEnergies' interests will be shared between the current partners, unless they object to such allocation, and that the role of operator will be taken over by one of the partners," the company said.

It said during this notice period, TotalEnergies will ensure the continuity of gas deliveries for the benefit of the population and it had indicated its willingness to ease the transition to the new operator and facilitate the transfer of staff.

TotalEnergies has a 31.24% share in the Yadana gas field (Blocks M5 and M6) in Myanmar, Unocal-Chevron has 28.26%, Thailand's PTTEP has 25.5%, and the Burmese state-owned company MOGE has 15%.

The Yadana field produces around 6 Bcm/year of gas of which about 70% is exported to Thailand where it is sold to national oil company PTT and 30% is sold to MOGE for domestic use, according to the statement.

It said the gas accounts for about half of the electricity in the Burmese capital of Yangon and also supplies the western part of Thailand through a pipeline operated by MGTC that carries gas to the Burmese-Thai border. The shareholders of MGTC are the same as the Yadana field.

Human rights

TotalEnergies said following the coup in Myanmar, it had decided to halt all ongoing projects, but continued producing gas from Yadana to maintain electricity supply to the local population, protect its employees from criminal prosecution or forced labor, and as much as legally possible, limit financial flows to state-owned MOGE.

However, these steps were not enough to meet the expectations of stakeholders who have called for a complete stop to revenues going to the Burmese state through MOGE.

"In fact, this is materially impossible for TotalEnergies, as most of the payments for the sale of the gas are made directly by the Thai company PTT, the buyer of the exported gas," TotalEnergies said. The company said it had also approached French authorities to consider targeted sanctions and escrow accounts without shutting down gas production, but had not identified any means for doing so.

But the human rights situation and rule of law has been worsening in Myanmar, leading TotalEnergies to to reassess the situation and decide that it "no longer allows TotalEnergies to make a sufficiently positive contribution in the country."