In response to repeated calls for them to cut ties with the military regime in Myanmar, energy giants Total of France and Chevron of the US on Wednesday announced they have suspended some payments to their joint venture with a state-owned company controlled by the coup leaders.
Since the coup on Feb. 1, international and local democracy advocates have repeatedly pressured oil and gas companies to suspend ties with the military regime, warning that it will use the proceeds of energy sales to commit more human rights violations in the country.
They have also urged that oil and gas payments be put in a trust or protected account and either held until such time as Myanmar has a legitimate and democratically elected government, or used for humanitarian purposes.
The oil-and-gas sector is Myanmar’s largest source of foreign exchange, earning at least US$1.5 billion annually.
Total said that in light of the unstable context in Myanmar, following a joint proposal by Total and Chevron at a shareholders meeting of Moattama Gas Transportation Company Limited (MGTC) on May 12, distribution of cash to the shareholders of the company has been suspended.
The decision is retroactively effective April 1. All cash distributions by MGTC to its shareholders—Total (31.24%), Chevron (28.26%), PTTEP (25.5%) and Myanma Oil and Gas Enterprise (MOGE) (15%)—are suspended, according to Total.
Total said it condemned the violence and human rights abuses occurring in Myanmar and reaffirmed that it will comply with any decision that may be taken by the relevant international and national authorities, including applicable sanctions issued by the EU or the US.
MGTC’s gas transportation system carries gas produced at the Yadana field operated by Total Exploration & Production Myanmar to the Myanmar-Thailand border over a distance of 400 km.
Total said it will continue to act as a responsible operator of the Yadana field, maintaining the production of gas in accordance with applicable laws, so as not to disrupt the electricity supply that is vital to the local populations of Myanmar and Thailand.
In a statement, Chevron said, “The humanitarian crisis in Myanmar requires a collective response to improve the welfare of the people of Myanmar.”
“Any actions should be carefully considered to ensure the people of Myanmar are not further disadvantaged by unintended and unpredictable consequences of well-intentioned decisions,” Chevron said.
While cautiously welcoming Total and Chevron’s decision to suspend dividend payments, rights group Justice for Myanmar (JFM) pointed out that income from MGTC accounts for only a small fraction of total payments from the Yadana project to the Myanmar military. MOGE owns just 15 percent of the pipeline company.
JFM said the latest decision leaves intact the vast majority of payments to the junta facilitated by Total, which include the state’s share of gas revenue, royalties and cost recovery from the Yadana gas field operation and corporate income tax from MGTC.
The rights group reiterated its calls for the immediate sanctioning of MOGE.
An investigation by France’s Le Monde newspaper revealed last month that Total’s gas operation in Myanmar has been propping up the military junta by diverting funds from gas sales to offshore accounts instead of the government.
According to documents accessed by the French newspaper and released after the military coup, the Yadana gasfield, which supplies gas to local markets in Myanmar and Thailand, is diverting revenue to the MOGE, which is managed by army officers and retired officers.
Chevron also has a longstanding partnership with MOGE. The two companies are joint investors in the Yadana offshore gas project, located off the southwest coast of Myanmar, which accounts for 42 percent of all oil and gas production from Myanmar’s offshore projects.
A New York Times report revealed that Chevron has intensively lobbied the US State Department and key congressional offices against sanctions, warning that they could disrupt its joint ventures in Myanmar.
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