France’s Total Exits Myanmar, Citing Shareholder Pressure Since Coup

TotalEnergies is the largest shareholder and operator of Myanmar’s largest natural-gas project, an offshore field called Yadana, providing energy for domestic use and export.

The project is a partnership between TotalEnergies,

Chevron Corp.

and Thailand’s

PTT Exploration and Production

PTTEP -0.78%

PLC, along with state-owned Myanmar Oil and Gas Enterprise, known as MOGE.

In February last year, Myanmar’s military overthrew the country’s elected government and jailed civilian leaders including Nobel Peace Prize winner

Aung San Suu Kyi.

Since the coup, state security forces have killed more than 1,400 people and jailed more than 11,000, according to the nonprofit Assistance Association for Political Prisoners.

The U.S. and some other Western governments responded to the coup with sanctions against top military leaders and army-linked companies. The U.S. has targeted dozens of individuals, including junta leader

Gen. Min Aung Hlaing,

as well as two of the country’s largest state-owned conglomerates.

Neither the U.S. nor European governments have sanctioned Myanmar’s energy sector, though they have faced calls by lawmakers and human-rights groups to do so. The European Parliament passed a resolution in October calling for the European Union to target the sector, as it prepares to weigh a new round of sanctions in early 2022.

In August, 462 civil society organizations petitioned the U.S., the U.K., the EU and Australia to blacklist MOGE. The groups asked that companies continue operating but deposit all payments to MOGE in escrow accounts that could only be accessed once democracy is restored.

TotalEnergies said in a statement Friday that it had continued after the coup to produce gas from the Yadana field to meet energy needs in Yangon, Myanmar’s largest city, and western Thailand, which imports it. It had tried to limit financial flows to MOGE while protecting its employees from the risk of criminal prosecution, it said.

In May, the company had said it had stopped some payments to MOGE, though the suspension applied only to a small percentage of total payments to the company related to gas transportation.

Shareholders and international and local civil-society organizations, however, continued to press TotalEnergies to stop all revenues from going to the Myanmar state. Doing that, the company said Friday, was “materially impossible.” As a result, it decided to initiate the contractual process of withdrawal as both shareholder and operator from the Yadana field and the associated pipeline company Moattama Gas Transportation Company Ltd., it said.

A spokesperson for Chevron, which owns a 28.26% stake in the project through a local affiliate, said the company was working to enable a planned and orderly transition leading to an exit from the country. “As a non-operator with a minority interest in the project, our immediate priority remains the safety and well-being of employees, safe operations and the supply of much-needed energy for the people of Myanmar and Thailand,” the spokesperson said.

Write to Feliz Solomon at [email protected]