PTTEP exits Yetagun gas field in Myanmar

Malaysia’s Petronas is also pulling out of a nearly depleted field

PTT Exploration and Production Plc (PTTEP) of Thailand and Petronas of Malaysia announce their withdrawal from the Yetagun natural gas project in coup-hit Myanmar.

Friday’s announcement was the latest in a series of moves by foreign energy companies to exit Myanmar. Most notable was the withdrawal of the American Chevron and the French TotalEnergies from the Yadana gas field, where PTTEP is taking over their interests.

Petronas subsidiary Carigali holds an approximate 41% stake in the Yetagun project while PTTEP holds a 19.31% share. The immediate future of the field is unclear as gas reserves there have drastically diminished.

“The withdrawal is part of the company’s portfolio management to refocus on projects that support the country’s energy security,” PTTEP chief executive Montri Rawanchaikul said in a statement on Friday.

PTTEP, the exploration arm of majority state energy company PTT Plc, said its stake would be reallocated proportionately to remaining shareholders with no commercial value, pending regulatory approval.

Petronas, which has operated the project since 2003, said in a statement that its decision followed a review and was part of an “asset rationalization strategy” to adapt to “the changing industrial environment and to the acceleration of the energy transition”.

The 24,130 square kilometer field in the Gulf of Moattama produces natural gas and condensate. The other two shareholders of the company are Nippon Oil and Gas Exploration of Japan and Myanma Oil and Gas Enterprise, controlled by the Burmese army.

Petronas has been experiencing difficulties related to the exploitation of the Yetagun field since the coup. More than 100 workers were stranded on an offshore platform in the aftermath of the military takeover in February last year. They were employed by a contractor and Petronas was responsible for ensuring their safety.

In April 2021, Petronas declared force majeure at the Yetagun field due to a significant drop in production. He said production rates had fallen below the technical threshold for the offshore gas processing plant.

PTTEP’s decision to leave Yetagun is not the end of its involvement with Myanmar.

In March, it announced it would resume operation of the much larger Yadana gas field to ensure energy security for Myanmar and Thailand.

Chevron and TotalEnergies said in January they would pull out of Myanmar following growing international pressure from human rights groups to cut financial ties with the junta.

The Yadana field in the Andaman Sea provides gas that fuels power generation in Myanmar and Thailand. It is one of several gas projects that Human Rights Watch says are Myanmar’s biggest source of foreign exchange earnings, generating more than $1 billion a year.

Myanmar’s military has interests in large parts of the country’s economy, including oil and gas.

Other international companies, including British American Tobacco and French renewable energy company Voltalia, have also withdrawn from Myanmar since the coup.

A spokesperson for rights group Justice for Myanmar has called on companies involved in the Yetagun gas project to completely sever ties with the military.

“The field is near depletion and we call on Petronas and its international partners to decommission the field in accordance with best environmental practices and to divest responsibly,” Yadanar Maung said.

“Petronas and their partners need to make sure there is no more revenue flow to the Burmese junta.”

More than 1,800 civilians have died in a military crackdown since last year’s coup and more than 13,000 have been arrested, according to a local watchdog group.