Texaco Selling Its Stake in Myanmar Gas Project

Texaco Inc. is selling its stake in a controversial natural gas project off the coast of Myanmar to Britain’s Premier Oil for $260 million but denies that it is giving in to widespread condemnation of that troubled Southeast Asian nation.

Texaco spokesman Chris Gidez said the company’s decision was purely economic and not influenced by the Clinton administration’s ban on new investment earlier this year or an international grass-roots campaign against Myanmar’s military leaders.

He said Texaco had not been harmed financially by consumer boycotts or the passage of selective-purchasing laws that prevent state or local governments from doing business with firms involved in Myanmar, formerly known as Burma. The European Union and Japan are challenging those laws in the World Trade Organization.

The Clinton administration’s latest prohibition did not impact Texaco’s Yetagun project because it covered only new investment, Gidez said.

“This [sale] was based on a good offer made and accepted,” he said, adding later, “It wasn’t really an issue of pressure from any direction.”

Myanmar’s ruling State Law and Order Restoration Council has become an international pariah in recent years. The aging generals wrested control of the country in 1988 and refused to relinquish power after the opposition party, led by Nobel laureate Aung San Suu Kyi, won a free election in 1990.

U.S. officials have been particularly critical of Myanmar’s role in the global drug trade and for widespread human rights violations.

Supporters of Suu Kyi, who has been confined to her house in Yangon since last fall, called Texaco’s withdrawal an important victory and vowed to increase pressure on Unocal and Arco, the major U.S. firms still involved in Myanmar.

“We believe the Texaco decision to leave Burma sends another message to the oil companies that corporate downsizing and exploiting U.S. workers to raise capital for investments in totalitarian countries . . . will not go unchallenged,” said Robert Wages, president of the Oil, Chemical and Atomic Workers International Union.

Adam Sieminski, an analyst with NatWest Securities in Baltimore, believes the Clinton administration’s sanctions contributed to Texaco’s decision to withdraw from that Asian hot spot. Another factor may have been Thailand’s recent economic troubles, since that country has agreed to buy 200 million cubic feet per day from the Yetagun field when it is up and running.

“In the columns of pluses and minuses, it was beginning to get more minuses,” Sieminski said.

The other partners in the Yetagun project are Petronas, Malaysia’s state energy monopoly; Nippon Oil Exploration of Myanmar; and PTT Exploration & Production, the major Thai energy company. Myanmar Oil & Gas Enterprise, the country’s state-owned energy company, also has the right to purchase a 15% stake.