October 17, 2021
From Global May Day

Main page: Blood Money Campaign

Following the week of action in September coordinators of the Blood Money campaign decided to call for another week of action in October. This time with the focus on the oil and gas industry.

What YOU can do!

Why the oil and gas industry?

Revenues from the oil and gas companies are flowing through the state-owned Myanmar Oil and Gas Enterprise (MOGE) on to the military. MOGE is effectively a department of the Ministry of Electricity and Energy (MOEE) and has entered four joint ventures for four different offshore gas projects: Yadana Project (operated by TotalEnergies and Chevron), Shwe Project (operated by POSCO International), Zawtika Project (operated by PTTEP), as well as the Yetagun Project (operated by Petronas – but currently production is halted). Approximately 80% of the gas is exported by pipeline to Thailand or China. MOGE acts as the revenue collector for the state’s royalties, profit share, and bonuses. Following the coup in February the military has control over all government bank accounts, including MOGE’s accounts.

According to the Extractive Industries Transparency Initiative (EITI) revenues and associated taxes from MOGE are the larges single source of foreign exchange available to the military. The oil and gas industry was forecasted to earn the MOGE revenues of about USD1.5 billion in 2020/2021 according to the Ministry of Planning, Finance and Industry.
Each investor in the joint venture also pays 25% of corporate income tax on their net profit.

The Yandana Project is the only project with contracts that are publicly available. MOGE in its role as a state enterprise entered into a Production Sharing Contract (PSC) with three “contractors”: TotalEnergies (31% ownership); Unocal, now Chevron (28% ownership), and PTTEP (26% ownership). MOGE participates in the PSC as a fourth contractor with 15% ownership. The gas is sold to PTT, the Thai state oil company and parent of PTTEP.

The gas produced is transported via a 63km onshore pipeline to the Thai border. The pipeline is managed by the Moattama Gas Transportation Company (MGTC), whose shareholding mirrors the joint venture participation under the PSC. In 2017-2018, MGTC paid taxes to the government and dividends to MOGE of USD141 million. Under the original agreement, these dividend payments can only be paid with the approval of PTTEP. TotalEnergies and Chevron and TotalEnergies is responsible for arranging payment of MGTC’s taxes. On 12th May 2021, shareholders of MGTC voted to suspend all cash distributions due to the unstable context in Myanmar.

TotalEnergies has an additional role as the “Operator” of the upstream production and the pipeline. This means that TotalEnergies is in charge of the day to day on site operations. It also facilitates the gas sales to PTT by submitting an invoice as a “representative” of the parties to the PSC.

According to TotalEnergies’s reports to the EITI, which is reproduced in the table below, the company appears to make revenue payments to MOGE in cash for cost recovery, MOGE’s profit share, the state profit share, and royalties.
TotalEnergies’s and MOGE’s Memorandum of Understanding states that, apart from the gas that is retained for domestic use, all MOGE entitlements under the PSC will be “‘taken ‘in cash’, i.e. paid to Myanmar and MOGE by the Foreign Participants in the Projects.” (earthrights.org, see section 4(d) of the Memorandum of Understanding)
This would suggest that at least TotalEnergies, if not also PTTEP and Chevron, are taking the gas, selling it and have cash liability to MOGE

It is estimated that around 50% of Myanmar’s foreign exchange now come from gas revenues. These revenues are likely to be crucial to the military’s ability to import fuel, weapons and equipment and its attempts to overcome the Civil Disobedience Movement (CDM) and assert control of the state.

All supporters of the Blood Money Campaign should pressure the companies involved, especially TotalEnergies and Chevron!

Freeze ALL payments to the Military Junta!
Place payments in escrow accounts!

The EU should place sanctions on MOGE and their partners!

Source: Globalmayday.net