TotalEnergies to help transfer Myanmar staff to new operator following withdrawal

French energy major TotalEnergies is now implementing its previously announced decision to withdraw from Myanmar. As a result, TotalEnergies’ stake in Myanmar assets will be distributed among remaining partners with Thailand’s PTTEP taking over as the new operator as well as taking on TotalEnergies’ employees in the country.

On 21 January 2022, TotalEnergies announced its decision to withdraw from the Yadana field and from gas transportation company MGTC in Myanmar, both as operator and as a shareholder, because the situation in this country no longer allowed TotalEnergies “to make a sufficiently positive contribution.”

Chevron, as one of the partners in the field, followed suit and also decided to exit the country. Unlike TotalEnergies, Chevron will exit Myanmar stake through a transaction, which serves to provide greater control over incoming JV parties.

Since then, TotalEnergies has initiated a due diligence process to ensure a responsible withdrawal for its stakeholders in Myanmar, particularly its employees and the local communities that have been supported by TotalEnergies for many years through its role as an operator in the MGTC gas pipeline area.

As reported earlier this week, PTTEP confirmed its willingness to take over as the operator of Yadana and MGTC and, in line with this decision, to increase its direct stake in Yadana by taking over TotalEnergies’ equity share. Chevron has also decided to take over TotalEnergies’ equity share, thereby increasing its stake in Myanmar. As a reminder, in light of the exceptional situation, TotalEnergies has chosen to withdraw from Myanmar without seeking any financial compensation for its assets.

In a statement on Wednesday, TotalEnergies said that PTTEP has expressed its willingness to take on all staff currently employed by the TotalEnergies affiliate in Myanmar. TotalEnergies said it is working closely with PTTEP to ensure that the transition occurs in a fair and orderly manner.

“With respect to our employees who have been ensuring the safety and efficiency of operations in Myanmar since January 21, TotalEnergies will help all those who wish to transfer to the new operator and will ensure that they continue to be employed under the same conditions,” the French company said.

At the same time, TotalEnergies will work with PTTEP to ensure that the existing socio-economic development programme led by TotalEnergies to support local communities living near the MGTC pipeline will continue after its withdrawal. To this end, TotalEnergies said it will allocate the resources necessary to a dedicated fund in order to contribute financially to the actions to be carried out by the future operator.

TotalEnergies’ withdrawal from Yadana and MGTC will be effective at the latest at the expiry of the six-month contractual period, i.e. 20 July 2022, giving the company and PTTEP enough time to ensure the transfer of the operatorship while ensuring a fair transition.

After the effective date of TotalEnergies’ withdrawal, PTTEP will hold 37.0842 per cent participating interest, while a subsidiary of Chevron, Unocal Myanmar Offshore Company, will hold 41.1016 per cent, which is the largest participating interest in the project.

A spokesperson for Chevron told Offshore Energy earlier this week that its exit plan was independent of TotalEnergies’ withdrawal and the two companies’ timelines for an exit would differ.

Chevron’s exit date will depend on several factors, including the progress of confidential commercial discussions, transfer of operatorship, and the well-being of employees.