Home Business TotalEnergies and Chevron will leave Burma

TotalEnergies and Chevron will leave Burma

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TotalEnergies throws in the towel. The group announced on Friday, January 21, its withdrawal from Burma, where it operates the Yadana gas field offshore and transports 30% of its production to supply electricity to the capital and the west of the country.

“The context which continues to deteriorate in Myanmar, in terms of human rights and more generally the rule of law, since the February 2021 coup, has led us to reassess the situation and no longer allows TotalEnergies to ‘to make a sufficient positive contribution in this country’, the group said in a press release. He ensures that this departure is done without any financial compensation.

→ READ. In Burma, resistance to the junta does not weaken

Its American partner Chevron also announced its disengagement. These decisions should be effective within six months.

Absence of international sanctions

For several months, pressure had been strong around TotalEnergies, particularly from NGOs but also from certain investors, who denounced in this presence in Burma an implicit support for the power in place through taxes and dividends paid. “Despite the actions taken, TotalEnergies has not been able to meet the expectations of many stakeholders,” underlines the energy specialist.

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According to him, it was above all the absence of sanctions from the international community after the return to power of the military junta that pushed the group to leave. TotalEnergies wanted Europe and the United States to put in place a ban on financial flows with the junta, which would have given a legal framework justifying its withdrawal from the country, where it has been present since 1992.

One of the main foreign investors in the country

TotalEnergies had already decided last year to suspend the payment of dividends and to abandon its gas field development project. He explains, on the other hand, that he was “materially impossible” to stop payments from Thailand, which buys 70% of Yanada’s production, because they are paid directly to the state-owned company Moge, controlled by the army.

→ ANALYSIS. The CEO of Total exposes his “dilemma” in Burma

In 2019, TotalEnergies paid around $230 million (€200 million) to the Burmese authorities, then around $176 million in 2020 (€155 million) in the form of taxes and “production rights”, according to the group’s annual reports. This made him one of the main foreign investors in the country, which only represents 1% of the group’s results.

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Since the coup, TotalEnergies had decided to make donations to associations for the defense of human rights in Burma, an amount equivalent to what it paid in taxes in the country.

The opposition is satisfied

TotalEnergies’ decision was welcomed by the “shadow government” Burmese, formed by deputies deposed during the coup. “Cutting the economic income of the junta is paramount to destroying the regime. Other companies should follow Total’s example,” said Naw Susanna Hla Hla Soe, her Minister for Women and Youth.

For now, only a few foreign companies have already left, including the Norwegian telecoms group Telenor and the French renewable energy producer Voltalia, whose majority shareholder is the Mulliez family, owner of Auchan.

Others, like EDF, Sweden’s H&M and Spain’s Benetton, have suspended operations.

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