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BURMA: Total says pulling out would raise hardship

by Ed CrooksFinancial Times
September 28th, 2007

Total of France, which operates a natural gas project in Burma, has expressed its "deep concern" over the situation in the country but rejected the idea it should pull out.

The company argues that its presence benefits tens of thousands of people and serves as a model for "business and political leaders looking for ways to address the country's human rights issues".

Alongside Chevron of the US, Total is one of the leading western companies still active in Burma.

In a statement, it said: "A forced withdrawal would only lead to our replacement by other operators probably less committed to the ethical principles guiding all our initiatives. Our departure could cause the population even greater hardship and is thus an unacceptable risk."

Total and Chevron are partners on the Yadana offshore gas project, which came on stream in 1998. Last year the field produced an average of 19.3m cubic metres a day, representing about half of Burma's total gas output.

Most of the gas is sold to Thailand; PTT, the Petroleum Authority of Thailand, is a member of the Yadana consortium. Chevron, which acquired its stake when it bought Unocal in 2005, said it was monitoring the situation.

Production has been steady since 2001. Total said it would not invest in any new projects in Burma, but would continue to spend on maintenance and in areas necessary to sustain production, such as drilling new wells and installing compressors.

In 2003 Bernard Kouchner, now French foreign minister, was commissioned as an independent consultant by Total to write a report on the group's involvement in Burma. He did not call for it to leave the country, but said the company "must come out clearly in favour of democracy".

Human Rights Watch, the New York-based campaign group, takes a similar view, saying it has a responsibility to speak out on events in Burma.

Arvind Ganesan of HRW said: "The Yadana project is probably one of the biggest revenue raisers, if not the biggest revenue raiser, for the Burmese government, so it gives them the ability to do the things they want to do."

He added that there was a similar responsibility on Thailand, which buys most of the Yadana gas, and other Asian countries that have been investing in Burma.

Western companies such as Premier Oil of the UK have pulled out.

But ONGC of India and CNPC of China, both state-controlled, have been building up their investments.

Burma's gas resources are sizeable, if not enormous. Proved reserves were 540bn cubic metres at the end of last year, according to the BP Review of World Energy.

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