French Oil Giant Total Suspends Gas-Related Cash Payments To Burmese Army; respect international sanctions
PARIS, May 28 (Reuters / AFP): Energy giant Total will comply with any new sanctions imposed on Myanmar by the United States and the European Union, Chief Executive Officer Patrick Pouyanne told a meeting on Friday. shareholders.
The French oil and gas group is however constrained by the current legal framework and cannot stop paying taxes in Myanmar or stop its production, added Pouyanne.
Previously, it was reported that the Burmese military had lost a source of income as French energy giant Total, cash payments to a joint venture with the military had been suspended due to the unrest in the country.
Total has come under pressure from pro-democracy activists to “stop funding the junta” since a military coup in February that was followed by a brutal crackdown on dissent.
More than 800 people have been killed by the military, according to a local watch group.
Total said in a statement that the decision to suspend payments was taken on May 12 at a meeting of shareholders of Moattama Gas Transportation Company Limited (MGTC), the joint venture that owns a pipeline connecting the Yadana gas field. and Thailand.
The suspension was proposed by Total, which owns a 31% stake in MGTC and its US partner Chevron (28%).
Thai company PTTEP owns a quarter of the company while 15% is owned by Myanmar Oil and Gas Enterprise (MOGE), controlled by the military.
MOGE generates annual revenues of approximately $ 1.0 billion from the sale of natural gas.
“In view of the volatile environment in Myanmar … cash distributions to company shareholders have been suspended” effective April 1, Total said.
He added that he “condemns the violence and human rights violations in Myanmar” and would comply with any potential sanctions against the EU or US junta.
The MGTC pipeline transports gas from the Yadana offshore field operated by Total to Myanmar’s border with Thailand.
Total said it would continue to produce gas so as not to disrupt electricity supplies in either country.
Total paid around $ 230 million to the Burmese authorities in 2019 and an additional $ 176 million in 2020 in taxes and “production rights,” according to the company’s own financial statements.
French newspaper Le Monde detailed Total’s involvement in MGTC in early May, also reporting that the company was based in the Bermuda tax haven.
“The colossal profits from gas operations do not pass into the state coffers of Myanmar, but are massively recovered by a company totally controlled by the army,” noted Le Monde.
A few days after the story was published, Le Monde said Total had posted several advertisements that it planned to run on its pages in the coming weeks.
– Foreign companies –
NGOs have urged foreign companies to review their presence in Myanmar as the military dramatically ramps up its use of lethal force against protesters.
The junta has vested interests in large parts of the country’s economy, from mining to banking, oil and tourism.
French energy giant EDF has suspended operations in the country, where it is involved in a $ 1.5 billion project to build a hydroelectric dam.
Japanese automaker Suzuki also halted operations at its two local factories shortly after the military coup. The factories assembled 13,300 vehicles in 2019, mainly for the domestic market.
But Suzuki, present in Myanmar since 1998, reopened the facilities a few days later and plans to build a third production site in the country.
Myanmar is also a key manufacturer in the garment industry, and groups such as Italy’s Benetton and Sweden’s H&M have suspended all new orders from the country.
Japanese brewer Kirin has said he will cut trade ties with the military with which he operates two local breweries, accusing the junta of acting “at odds” with its human rights principles.
But the company said it currently has no plans to completely pull out of a market that accounts for around 2% of its overall revenue. – AFP