Chevron boosts exposure to conflict-hit Myanmar before exit

[NEW YORK] Chevron is increasing its ownership in a gas project in Myanmar as it still works on a plan to leave the country due to violence and human rights violations following last year's military coup.

The company, which announced in January an intention to end business in Myanmar, will nonetheless take over TotalEnergies's stake in the Yadana gas field and the 250-mile (about 400-kilometre) MGTC pipeline as an interim measure while the French company exits the country as promised. TotalEnergies has been the operator of the Yadana gas field - in which it has a 31.2 per cent stake - since 1992.

A subsidiary of Thailand's national energy company PTT has also agreed to boost its stake in the joint venture and earlier offered to take over as operator of the project.

The move by Chevron and the PTT unit to take over TotalEnergies's equity could have the effect of preventing state-owned Myanmar Oil & Gas Enterprise (Moge), the project's other owner, from substantially expanding its participation in the Yadana gas field. It was not immediately clear if any of the equity stake would go to Moge under the arrangement.

Chevron's decision to increase its ownership doesn't signal it's backtracking on its eventual plans to exit the country. Rather, the company said its boosted stake "will provide greater control over incoming JV parties" and that it still intends to exit. The transaction supports the US oil giant's goal of achieving a "safe and orderly transition" and keep gas flowing for the people of Myanmar and Thailand, the company said in an emailed response to questions.

Chevron doesn't yet have an exit date for the country and its timeline will be different than that of TotalEnergies. The exit date will depend on the progress of confidential commercial discussions, the transfer of operatorship and the well-being of the company's employees, the company said.

TotalEnergies booked a US$305 million impairment related to its decision to exit Myanmar without seeking any financial compensation for its assets. BLOOMBERG