Chevron Struggles to Exit Myanmar Gas Project After Nearly Two Years

Nearly two years after U.S. energy company Chevron condemned violence and human rights abuses in Myanmar and announced it would leave, the company said it still holds assets there, including a portion of an offshore gas field in a venture with the state energy company.

Chevron said in January 2022 it would exit Myanmar and in February 2023 said it had agreed to sell its assets there, including a 41.1% stake in Myanmar's Yadana gas field, to Canada's MTI Energy for an undisclosed price.

But the company told Reuters this week it still owns the assets. Chevron is ensuring its exit from Myanmar is "conducted in a planned and orderly manner," said a spokesperson, who gave no timeline for when that would happen and did not indicate whether there was any difficulty in completing the sale to MTI.

"We have signed an agreement to sell the company's interest in all Myanmar assets and exit the country. The terms of the agreement are confidential," the spokesperson said.

The Biden administration on Tuesday imposed sanctions on certain financial services by Americans to Myanmar's state oil company, MOGE, starting on Dec. 15, in the first direct action on the enterprise aimed at weakening the military junta that controls it. 

It is uncertain whether the sanctions could affect Chevron.      

Myanmar has been in crisis since the army overthrew the elected government in 2021. A crackdown on dissidents has since given rise to a nationwide resistance movement backed by several ethnic minority armies.

Rights groups and United Nations experts have accused the military of committing atrocities against civilians in its efforts to crush the resistance. 

The junta says it is fighting "terrorists" and has ignored international calls to cease hostilities.

MTI, which has come under pressure from activists for its planned purchase of Chevron's share of Yadana, did not immediately respond to a request for comment. 

Chevron has said it is selling to MTI through its subsidiary Et Martem Holdings, based in Bermuda. Efforts to find a contact for Et Martem were unsuccessful. 

French oil and gas group TotalEnergies TTEF.PA left the Yadana gas project in 2022, which increased Chevron's stake from 28% to 41.1%. The other stakeholders are the operator PTTEP PTTEP.BK, a unit of Thai national energy company PTT, and Myanmar's MOGE, controlled by the junta. 

Located in the Gulf of Martaban, the Yadana field has produced around 6 billion cubic metres per year of gas, about 30% of which has supplied to MOGE for domestic use and 70% exported to Thailand.

In 2021, Total and Chevron suspended some payments from Yadana that would have reached Myanmar's junta, earning praise from pro-democracy activists.

Chevron, which in 2021 lobbied U.S. lawmakers and government officials to protect its interests in Myanmar from sanctions, did not comment on the sanctions, other than saying it abides by laws and regulations, including the measures.

 (Reporting by Timothy Gardner in Washington and Sabrina Valle in Houston; additional reporting by Simon Lewis; editing by Jonathan Oatis)

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