TotalEnergies takes steps to exit Yadana offshore Myanmar

Jan. 21, 2022
The company’s decision to exit both as operator and shareholder follows Myanmar’s coup in February 2021.

Offshore staff

PARIS – TotalEnergies has started the contractual process of withdrawing from the producing Yadana gas field offshore Myanmar and the 400-km (248-mi) MGTC-operated pipeline that exports production to the Myanmar/Thai border.

The company’s decision to exit both as operator and shareholder follows Myanmar’s coup in February 2021, which TotalEnergies has condemned.

Since the coup, the company has halted work on all ongoing projects in-country but has continued to produce gas from Yadana – both to ensure sustained electricity to the local Burmese and Thai population, and to protect the company’s employees from the risk of criminal prosecution or forced labor.

Where possible, it has sought to limit the financial benefits state-owned oil company MOGE.

TotalEnergies has operated the field in blocks M5 and M6 since 1992, in partnership with Unocal-Chevron, PTTEP, and MOGE.

Yadana produces around 6 bcm annually of which around 70% is exported to western Thailand for sale to PTTEP, and the remaining 30% to MOGE for domestic use. The gas helps to provide roughly half of the electricity consumed in the Burmese capital Yangoon.

TotalEnergies added that it had not been able to halt the flow of revenues to the Burmese state as most of the payments for the gas sold are made by the Thai company.

It had also asked the French authorities to consider targeted sanctions that would confine limit all financial flows of the various partners to escrow accounts, without shutting down the gas production.

The company now plans to withdraw with no financial compensation for doing so. It has notified its partners in Yadana and MGTC that the exit will take place by the expiry of the six-month contractual period.

The agreements allow for one of the partners to assume the role of operator, although the company plans to maintain control for the time being to ensure continuity of gas deliveries to the population.