Malaysian operator and Thai partner pull out of Myanmar’s Yetagun field
Malaysia’s state-owned oil and gas company Petronas and Thailand’s national player PTTEP have both decided to withdraw from the Yetagun field located offshore Myanmar.
Petronas’ subsidiaries, Petronas Carigali Myanmar Inc (PCMI) and PC Myanmar (Hong Kong) Limited (PCML), on Friday announced their withdrawal from Blocks M12, M13, and M14 located in the Yetagun field. The field consists of Yetagun Main and Yetagun North and is located in the Andaman Sea.
PCML had operated the Yetagun Gas Project since 2003, where it held 40.9 per cent participating interest. Other partners included Myanma Oil & Gas Enterprise (20.5 per cent), Nippon Oil Exploration (Myanmar) Limited (19.3 per cent), and PTTEP International Limited (19.3 per cent).
According to Petronas’ statement, the decision was made following a thorough techno-commercial review in alignment with the company’s asset rationalisation strategy for a portfolio that fits with its growth ambitions amid the changing industry environment and accelerated energy transition.
Last year, Petronas experienced difficulties related to the Yetagun field. First, in February 2021, over a hundred workers were left stranded on the Yetagun oil rig after a military coup in the country earlier that month. The workers were employed by a contractor and Petronas was extending the necessary efforts to ensure their safety.
Later on, in April 2021, Petronas declared force majeure on the Yetagun field due to a significant decline in output. The decision was made following challenges in the wells deliverability that resulted in the production rate dropping below the technical threshold of the offshore gas processing plant.
Announcing its decision on Friday, Thailand’s PTTEP said that the withdrawal from the Yetagun project and the gas transportation company in Myanmar is part of the company’s portfolio management to refocus on projects that support the energy security of the country.
Montri Rawanchaikul, PTTEP Chief Executive Officer, said the company has notified the joint venture partners in the Yetagun project and Taninthayi Pipeline Company LLC (TPC), a gas transportation company delivering gas from the Yetagun project to Thailand, of its decision to withdraw as the partner from both entities. PTTEP’s shares of 19.31 per cent will be allocated proportionately to the remaining shareholders with no commercial value and will be effective upon regulatory approval.
The exit by these two companies from the Yetagun field follows a recent decision by Frech TotalEnergies to withdraw from its operations in Myanmar, specifically the Yadana field, without any financial compensation amid a worsening situation following last year’s military coup in the country.
Chevron, as one of the partners in the field, followed suit and also decided to exit the country. However, unlike TotalEnergies, Chevron will exit the Myanmar stake through a transaction, which serves to provide greater control over incoming JV parties.
The withdrawal by the French company was announced in January 2022 and, by March, the company was already implementing the decision with PTTEP taking over as the new operator as well as taking on TotalEnergies’ employees in the country.