NUG Demands Thai Energy Giant Switches Off Gas Payments to Myanmar Junta

Myanmar’s civilian National Unity Government (NUG) has sent a formal demand letter to Thailand’s state-owned PTT Exploration and Production Public Company (PTTEP), asking the oil and gas giant to suspend dividend payments from the Yadana offshore gas field to the junta-controlled Myanma Oil and Gas Enterprise (MOGE) and deliver future payments to an NUG account.

The demand to the PTTEP was made according to contracts signed between MOGE and oil companies, said the NUG, warning that it would take the matter to arbitration in Singapore if the Thai firm failed to cooperate within 30 days.

The NUG made two demands: that the PTTEP provides the civilian government with information on revenues paid to the junta under the relevant contracts, as well as monthly reports and other details of work carried out since the coup; and that dividend payments to the junta be suspended, the NUG’s planning, finance and investment minister, U Tin Naing Tun, told an online press conference on Monday.

“We intend to cut off the money that flows through MOGE to the junta and funds its violence,” the minister said.

MOGE recorded revenue of more than US$800 million in the second quarter of 2022, with the major share of that revenue coming from the Yadana offshore gas field operated by PTTEP in the Andaman Sea.

Energy giants TotalEnergies of France and Chevron of the US have withdrawn from the Yadana project, citing the “worsening” human rights situation in military-ruled Myanmar. Only PTTEP and MOGE are now operating in the Yadana gas field.

NUG’s electricity and energy minister U Soe Thura Tun said: “We don’t want to harm PTTEP and we don’t want to interrupt its operations. We are just doing what we should do for the people of Myanmar.”

Despite foreign energy giants calling a halt to their operations in Myanmar and the decline in production in some offshore fields including Yadana, the regime still earns between US$80 million and US$100 million per month from oil and gas revenues, U Soe Thura Tun said.

Amid growing pressure from human rights groups to cut financial ties with the military junta, PTTEP said early this year that it had indefinitely postponed its $2 billion gas-to-power project in Myanmar.

However, the Thai firm said it would not stop operating gas fields including Yadana, citing the need for energy security in Thailand and Myanmar and possible impacts on the livelihoods of people in both countries.

Yadana, according to PTTEP, is the main source of natural gas supply for electricity generation serving populations in western Thailand and in Myanmar. PTTEP supplies natural gas for half of electricity generated in Myanmar and 20 percent of electricity generated in Thailand.

PTTEP was capable of suspending dividend payments to the junta, said U Soe Thura Tun, citing the example of the Shwe gas field.

South Korea’s POSCO is the main operator of the Shwe gas field with India’s ONGC and GAIL, while MOGE has a holding stake in the project. China’s CNPC runs the gas pipeline. Since POSCO sells the gas to China in euros, EU sanctions affect the project, and around US$200 million in dividend payments from the Shwe gas project destined for the junta are being held in an escrow account, said the minister.

The Yadana, Shwe, Zawtika and Yetagun fields are the major source of oil and gas revenues for the junta’s MOGE. Oil and gas from those projects are mainly exported to China and Thailand.

Oil corporations including US giant Chevron, France’s TotalEnergies, Australia’s Woodside, and Malaysia’s Petronas have withdrawn from Myanmar following the junta’s human rights violations and sanctions imposed by western countries since the coup.

Asia deputy director of Human Rights Watch Phil Robertson responded on Twitter to the NUG’s letter, saying that demanding that PTTEP make payments to the civilian government instead of the junta was an important move.

“Thailand should stop supporting the murderous junta now,” he wrote.