Wednesday, February 01, 2023

A Blind Eye to Myanmar Dictatorship

 Some of the world’s biggest oil and gas service companies continued to make millions of dollars from operations that have helped prop up the  Myanmar military regime.

More than 2,940 people, including children, pro-democracy activists and other civilians have been killed since Myanmar's military seized power in February 2021's coup.

US, UK and Irish oil and gas field contractors – which provide essential drilling and other services to Myanmar gas field operators – have continued to make millions in profit in the country.

The US state department warned in January last year there were significant risks in doing business in the country – including with state-owned entities that financially benefit the junta, such as the national oil and gas company Myanma Oil and Gas Enterprise (MOGE). On Tuesday the US, UK, Australia and Canada announced more Myanmar sanctions, including on the managing director and deputy managing director of MOGE. But they stopped short of sanctioning MOGE itself. Last February the European Union became the first jurisdiction to announce sanctions against MOGE itself in light of the “intensifying human rights violations in Myanmar” and the “substantive resources” MOGE provides the junta.

- US oil services giant Halliburton’s Singapore-based subsidiary Myanmar Energy Services reported pre-tax profits of $6.3m in Myanmar in the year to September 2021, which includes eight months while the junta was in power.

- Houston-headquartered oil services company Baker Hughes branch in Yangon reported pre-tax profits of $2.64m in the country in the six months to March 2022.

- US firm Diamond Offshore Drilling reported $37m in fees to the Myanmar tax authority during the year to September 2021 and another $24.2m from then until March 2022.

- Schlumberger Logelco (Yangon Branch), the Panama-based subsidiary of the US-listed world’s largest offshore drilling company, earned revenues of $51.7m in the year to September 2021 in Myanmar and as late as September 2022 was owed $200,000 in service fees from the junta’s energy ministry.

The major gas projects in which MOGE has significant shareholdings are run by the South Korean corporation Posco International, Thailand’s PTTEP and Gulf Petroleum Myanmar, also from Thailand. 

The services provided to Myanmar’s Asia-owned gas field operators by these companies gave vital support to MOGE, which is a major shareholder in all of the country’s most important oil and gas projects. MOGE collects taxes and royalties for the state on gas field projects, ensuring that the junta gets lucrative tax and royalty payments, as well as a vast share of profits. According to the junta’s own figures the oil and gas industry is its biggest source of foreign-currency revenue, bringing in $1.72bn in the six months to 31 March 2022 alone.

Any role played by western gas field contractors in Myanmar’s gas and oil industry after the coup makes them complicit in the junta’s war of aggression. Myanmar’s state-owned gems, pearl and timber industries have been sanctioned by the US but Washington has not yet tackled MOGE, the linchpin in the junta’s largest single source of foreign revenue. In 2021 the New York Times reported that the oil giant Chevron had led an intense lobbying effort against sanctions that would disrupt oil operations in the country. 

Yadanar Maung, Justice For Myanmar spokesperson, called the situation “deplorable”.

“Oilfield service companies in Myanmar have blood on their hands for operating in an industry that bankrolls the illegal Myanmar military junta, as it wages a campaign of terror against the people.” Maung said the Biden administration’s contradictory approach to Myanmar “has allowed US oil and gas corporations to continue business as usual in Myanmar, enabling the junta’s international crimes”.

 The UN’s special rapporteur on Myanmar, Tom Andrews, had told the US Congress that MOGE was “now effectively controlled by a murderous criminal enterprise” and called on it and other state entities to be sanctioned in order to “meaningfully degrade the junta’s sources of revenue”.

The state department has specifically warned of the dangers of doing business in the country and cited MOGE as particularly problematic. MOGE and other state-owned enterprises “not only generate revenue for a military regime that is responsible for lethal attacks against the people of Burma, but many of them also are subject to allegations of corruption, child and forced labor, surveillance, and other human and labor rights abuses”.

Yet, the US commerce department’s country commercial guide for Myanmar, last updated in July 2022, describes the “dynamic” oil and gas sector as a “best prospect industry” with “significant opportunities for US investors”.

Revealed: how world’s biggest fossil fuel firms ‘profited in Myanmar after coup’ | Myanmar | The Guardian

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