The French energy giant TotalEnergies has signaled its support for targeted sanctions on Myanmar’s oil and gas industry, the largest single source of income for the country’s military administration. In a letter to Human Rights Watch (HRW) that was made public by the U.S.-based rights group yesterday, the Total CEO Patrick Pouyanné said the company was doing everything it could to avoid funding the junta that seized power in February of last year.
Pouyanné said that the company had spoken with French and U.S. authorities concerning the implementation of targeted sanctions on Myanmar’s gas revenues and said Total “will not only comply with any sanction decision from the European or American authorities but also supports the implementation of such targeted sanctions.”
Since the 1990s, Total has operated the Yadana offshore gas project, which directs revenues to the state-owned Myanma Oil and Gas Enterprise (MOGE). While Western governments have imposed a range of targeted sanctions on senior military commanders and conglomerates connected to the military, they have so far stopped short of targeting MOGE, which, according to a United Nations human rights expert, “represents the single largest source of revenue to the state.” According to a Myanmar government forecast, MOGE is expected to earn $1.5 billion from oil and gas projects in 2021-2022.
In an open letter published in August, a group of 462 civil society organizations called on Western governments to blacklist MOGE, arguing that it was propping up the military regime, “even as it commits atrocities, from air strikes on communities in ethnic areas to detaining and torturing peaceful protesters and journalists.” It advised that gas production should continue but that revenues be paid into an escrow account “until a legitimate, democratic government is in power.” The U.S. Congress and European Parliament have also recommended that MOGE be targeted.
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Pouyanné’s January 18 letter to HRW stated that Total had formally asked the French Ministry of Foreign Affairs to put in place sanctions that would create “a legal framework to respond to calls requesting us to stop the financial flows” to MOGE.
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Total’s policy shift marks a major breakthrough for the activists and those who have sought to choke off Myanmar’s oil and gas revenues. Until this week, the French company had condemned the violence and made clear that it would comply with any Western sanctions on Myanmar’s oil and gas industry. But it also urged caution, arguing that the Yadana gas field provided around half of the power used by Myanmar’s largest city, Yangon, and a large area of western Thailand. The firm said it was maintaining the production of gas at Yadana, “so as not to disrupt the electricity supply that is vital to the local populations of Myanmar and Thailand.”
With Myanmar’s political crisis showing no sign of resolving soon, Total’s shift perhaps reflects an assessment that the harm and reputational damage from continuing to operate in Myanmar outweighs the potential profit. The question now is whether other foreign oil companies will follow suit. Chief among them is the U.S. energy firm Chevron, whose local affiliate Unocal Myanmar Offshore Co. Ltd. which is involved in the Yadana project. In April, it emerged that Chevron has actively lobbied against the imposition of U.S. government sanctions against Myanmar’s oil and gas industry.
While the company said it intends to continue the operation of the Yadana gas field for the reasons stated above, its public support for sanctions marks an important step forward, and will make it harder for Western governments to avoid targeting Myanmar’s oil and gas revenues, especially as the situation inside the country continues to worsen. As John Sifton of HRW put it in a statement yesterday, “governments now have no reason to oppose or avoid tough measures that show support to the millions of people in Myanmar who want justice and accountability.”