Total’s CEO cites humanitarian reasons for continuing Myanmar gas production

James Regan April 05, 2021
Some of Myanmar's citizens are opposed to a military takeover of government on February 1.
Some of Myanmar's citizens are opposed to a military takeover of government on February 1.

(Bloomberg) - French oil major Total SE must continue to produce gas in Myanmar and pay taxes to the military junta to protect staff from forced labor and maintain electricity supplies, Chief Executive Patrick Pouyanne said in an op-ed in Le Journal du Dimanche newspaper.

Amid calls not to provide funds to the military, which ousted Myanmar’s parliament on Feb. 1, Total is scrapping plans to develop gas off the west coast and halting its gas well drilling campaign, Pouyanne said. He added that Total would donate the equivalent of the taxes owed to human rights associations.

Stopping gas production in protest against political developments would expose workers to “a terrible situation,” the chief executive said in the op-ed published on Sunday.

Total CEO Patrick Pouyanne
Total CEO Patrick Pouyanne

Total took this decision, Pouyanne said, “not because we want to maintain our profits and continue to pay taxes to the military junta. But to guarantee the safety of the people who work for us, employees and managers, to protect them from prison or forced labor, and to avoid further worsening the living conditions of the people by depriving millions of electricity.”

Total has been present since 1992 in Myanmar, where it employs around 250 people. The Yadana offshore gas field, which Total operates under a production sharing contract, provides half the electricity for the city of Yangon, with almost 5 million inhabitants, and supplies western Thailand, where most of the gas is exported.

Vital Source

Myanmar has awarded 38 offshore oil and gas blocks to majors including Royal Dutch Shell Plc, Total, Woodside Petroleum Ltd., China National Petroleum Corp., Reliance Industries Ltd. and Eni SpA over the last three decades, according to the website of Myanmar’s electricity and energy ministry.

Pouyanne said Total hadn’t paid taxes directly to the military government since the February coup because the banking system no longer functioned. Once re-established, however, the company would have to stop producing gas if it wanted to close off this revenue source.

Thai authorities have also told Total the gas is a vital source of energy for their population in the west of the country, he said, adding that most of the taxes come from gas exports and are paid by Thai oil group PTT Pcl.

Total has considered putting the $4 million of monthly taxes it owes the state of Myanmar into an escrow account, but this would expose local managers to imprisonment, Pouyanne said.

A group led by Electricite de France SA suspended the development of a hydropower project in Myanmar last month, citing human rights concerns. The project hadn’t reached a final investment decision.

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