EU sanctions Myanmar oil firm for providing resources to junta
While some companies are leaving the country after the coup, Thailand's PTT is planning to step up engagement
published : 22 Feb 2022 at 11:41
writer: Bloomberg News
The European Union imposed fresh sanctions against Myanmar’s military regime, focusing on a lucrative state-owned oil and gas company that has been a key source of revenue for the junta more than a year after the coup - and a partner of Thailand's PTT.
The new listings target 22 individuals including government ministers, as well as high-ranking members of the Myanmar Armed Forces, the European Council said Monday. It also targets four entities, including state-owned companies like Myanma Oil and Gas Enterprise, which were found to provide the regime with “substantive resources”.
Myanmar’s oil and gas sector has become a target of international pressure of late as one of the junta’s most important sources of income and foreign exchange given oil products are priced in US dollars. MOGE is the operator and regulator of the oil and gas sector, overseeing exploration and the distribution of petroleum products. It also grants permits and collects tax on profits made by private companies that are in production sharing contracts or joint ventures.
“MOGE is thus controlled by and generates revenue for the Tatmadaw, therefore contributing to its capabilities to carry out activities undermining democracy and the rule of law in Myanmar,” the European Union said in an update of its legislation, referring to the armed forces by its official name.
The military regime’s spokesman and the Ministry of Electricity and Energy couldn’t be immediately reached for comment.
The sanctions came after TotalEnergies SE and Chevron Corp last month said they would pull out of Myanmar to protest against the junta’s continued violence against civilians since the military coup. Both these companies have operated in Myanmar for decades in production sharing contracts or joint ventures with MOGE and have come under criticism for engaging in business with military government.
“History shows that when the junta was previously in place in the 1990s, gas revenues from Total and Chevron/Unocal helped them to withstand international sanctions as their reserves dwindled,” a group of US senators advised Treasury Secretary Janet Yellen and Secretary of State Antony Blinken last year in a letter.
Japanese trading house Mitsubishi Corp followed suit last week with plans to sell its stake in a natural gas field in Myanmar. While some companies are leaving, others are planning to step up engagement. Earlier this month, a junta spokesman said PTT Plc, Thailand’s state-controlled energy company, is bidding to take control of Myanmar’s Yadana gas field with PTT Exploration and Production Plc offering to acquire the combined 59.5% stake held by TotalEnergies and Chevron.
The US has recently targeted Myanmar government officials and businessmen as well as a private logistics company and an army-run procurement agency in sanctions marking one-year since the coup, though it has yet to impose any against MOGE.
The EU’s restrictive measures against Myanmar now apply to a total of 65 individuals and 10 entities, and include an asset freeze and a prohibition from making funds available to the listed individuals and entities.