TotalEnergies Gives Up Myanmar Asset To PTTEP For Nothing
This article was first published on Rigzone here
Thailand’s PTT Exploration & Production (PTTEP) will be taking over operatorship of the Yadana gas field off Myanmar following TotalEnergies' departing the country due to the junta’s continued violence against civilians.
PTTEP said in a statement that it would take over operatorship in July and that the transaction would have no commercial value.
To remind, TotalEnergies stated in January that it would be withdrawing from the Yadana field, MGTC, and Myanmar altogether. The French company claimed that it would abandon Yadana and MGTC both as operator and as a shareholder without any financial compensation.
This was confirmed by PTTEP yesterday as the Thai company released a statement in which it claimed that it carefully considered the status of the Yadana project and that it placed ‘utmost importance on continuity in gas production and preventing disruption to energy demand’ since the project is ‘a pivotal source of natural gas supply’ to the people of Myanmar and Thailand.
“The existence of a reliable source of energy to serve the domestic consumptions is essential for improving people’s standard of living and driving the country economy. To this regard, natural gas from the Gulf of Moattama, Myanmar, has been supplied to generate electricity for households and industrial sectors in Thailand and Myanmar, covering medical service and public health, education, transportation, communication, and telecommunication,” PTTEP said.
According to data provided by the company, Yadana currently produces natural gas at the rate of around 770 million standard cubic feet per day. Around 220 mmscfd accounts for 50 percent of the country’s gas demand and is pushed towards electricity generation in Myanmar.
Thailand also relies on this source of energy as around 550 mmscfd of gas from the field is fed to 12 various power plants for electricity generation, serving the demand of 11 million people living in the west and central part of the country. The amount of this imported gas contributed to about 11 percent of Thailand’s gas demand.
“After the decision of TotalEnergies to withdraw from Yadana project, PTTEP has thoroughly considered taking a step as the successor operator to ensure the no interruption of natural gas supply and to reinforce long-term energy security, especially in the current circumstances, where other forms of energy are not the primary source for electricity generation.
Take control of your future.
Search THOUSANDS of Oil & Gas jobs on Rigzone.com
Search Now >>
“Considering the current situation in Myanmar and certain timeframe for the change of operator, PTTEP as a capable company with the operation familiarities of the Yadana field will help secure the continuity of natural gas supply and, more importantly, safe operation,” PTTEP explained.
The nomination of PTTEP as the new operator was approved by the remaining partners in this project and the transfer of operatorship is expected to be completed on July 20, 2022.
TotalEnergies’ share will be allocated proportionately to the remaining joint venture partners with no commercial value. After the effective date of TotalEnergies’ withdrawal, PTTEP will hold 37.0842 percent participating interest, while a Chevron subsidiary will hold 41.1016 percent. The downside to this is that MOGE will also get an increased stake, its share of Yadana will climb up to 21.8142 percent from 15 percent as it is the only other stakeholder.
MOGE is Myanmar’s state-owned company and a massive source of revenue for the junta. Notable, it was placed under sanctions by the EU last month.
Chevron also previously announced it would be exiting Yadana. Unlike TotalEnergies, the U.S. supermajor is looking to sell its stake but in contrast to TotalEnergies, it wants to do so via a commercial transaction – which would earn the company some money – but one which would not increase MOGE’s stake.
Estimates by Rystad Energy put a price tag on Chevron’s interest at somewhere between $200 and $250 million. But it is almost impossible that the supermajor can get that amount of money for the asset as PTTEP is the only possible buyer at this point since companies are almost universally leaving the country.
Along with TotalEnergies and Chevron, Mitsubishi and Petronas also opted to exit Myanmar and divest their stakes in the Yetagun gas project.
To contact the author, email bojan.lepic@rigzone.com
More From Rigzone.com, The Leading Energy Platform:
