Energy giants TotalEnergies and Chevron said on Friday they would leave Myanmar following pressure from human rights groups to cut financial ties with the military junta since Israel’s military coup. last year.
International pressure has grown against the junta since the February 2021 coup that toppled civilian leader Aung San Suu Kyi, who was sentenced to four years in prison this month and faces five new charges of corruption.
Western powers have imposed sanctions on the junta while some international companies have left the country, temporarily halted operations or suspended business transactions
The junta will lose key financial partners with the withdrawal of the French oil major TotalEnergies and the American Chevron from the Yadana gas field in the Andaman Sea, which supplies electricity to Myanmar and Thailand.
“The situation, in terms of human rights and more generally the rule of law, which has continued to deteriorate in Myanmar…has led us to reassess the situation and no longer allows TotalEnergies to provide a positive enough contribution in the country,” said the French oil company.
The coup was followed by a crackdown on dissent that left 1,400 civilians dead, according to local watchdog groups.
US energy giant Chevron said it was leaving “in light of the circumstances in Myanmar”.
“We have reviewed our interest in the Yadana natural gas project to allow for a planned and orderly transition that will lead to an exit from the country,” spokesman Cameron Van Ast said.
The military has interests in large parts of the country’s economy, from mining and banking to oil and tourism.
Human Rights Watch welcomed the French company’s withdrawal and called on governments to “prevent any other unscrupulous entities from entering the market.”
“Total’s announcement shows how pressure from investors and human rights-focused companies can work. Governments no longer have an excuse to delay imposing targeted sanctions on oil and gas entities. “, HRW Myanmar researcher Manny Maung told AFP.
On Friday, the junta sentenced Phyo Zeyar Thaw, a member of Suu Kyi’s ousted National League for Democracy party, to death for terrorism.
– $1 billion a year –
Since the coup, British American Tobacco and the French renewable energy company Voltalia have left the country.
Norwegian telecommunications operator Telenor, which sold its local subsidiary, this week sold its stake in a Burmese digital payment service after the coup.
Italy’s Benetton and Sweden’s H&M suspended all new orders from the country last year.
According to HRW, natural gas projects are Myanmar’s biggest source of foreign exchange earnings, generating more than $1 billion every year.
But Total said it had not identified any way to sanction the military junta without avoiding shutting down gas production and then paying the military-controlled Myanmar Oil and Gas Enterprise (MOGE).
The company announced last year that it was suspending cash payments to its joint venture with the military, Moattama Gas Transportation Company Limited (MGTC).
TotalEnergies paid more than $400 million in total to the Burmese authorities in 2019 and 2020 in the form of taxes and “production rights”.
Total said on Friday that it had tried “as far as materially and legally possible” to limit the financial flows received by the MOGE.
But he said it was “materially impossible” to prevent the revenue streams, as Thailand’s national energy company PTT made most of the gas sales payments.
Total, which holds the largest stake in the gas field, will continue to operate the site for at least the next six months until the end of its contract period.
– “Toxic” investment environment –
Richard Horsey, senior Myanmar adviser at the International Crisis Group, said the announcement “reflects how toxic Myanmar has become as an investment environment”.
But he said leaving without any compensation means other partners, including the regime, “will get a windfall in the form of an increased share of the project”.
PTT chief executive Montri Rawanchaikul said on Friday the company was “carefully reviewing” its management after TotalEnergies’ announcement.
Myanmar’s national unity shadow government said the news sent a “very strong message” to the ruling junta.
“Other companies must follow Total’s example to put even more pressure on the generals to stop their bloody crackdown,” shadow minister Naw Susanna Hla Hla Soe said.