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    Revealed: how world’s biggest fossil fuel firms ‘profited in Myanmar after coup’

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    Revealed: how world’s biggest fossil fuel firms ‘profited in Myanmar after coup’Leaked tax records suggest subsidiaries of international gas field contractors continued to make millions after the coup In the two years since a murderous junta launched a coup in Myanmar, some of the world’s biggest oil and gas service companies continued to make millions of dollars from operations that have helped prop up the military regime, tax documents seen by the Guardian suggest.The Myanmar military seized power in February 2021 and according to the United Nations special rapporteur on Myanmar, it is “committing war crimes and crimes against humanity daily”. More than 2,940 people, including children, pro-democracy activists and other civilians have been killed, according to Assistance Association for Political Prisoners.Amid this violence, leaked Myanmar tax records and other reports appear to show that US, UK and Irish oil and gas field contractors – which provide essential drilling and other services to Myanamar’s gas field operators – have continued to make millions in profit in the country after the coup.The documents were obtained by transparency non-profit Distributed Denial of Secrets and analysed by Myanmar activist group Justice For Myanmar, investigative journalism organisation Finance Uncovered and the Guardian.The documents suggest that in some cases the subsidiaries of major US gas field service firms continued working in Myanmar – even after the US state department warned in January last year there were significant risks in doing business in the country – including with state-owned entities that financially benefit the junta, such as the national oil and gas company Myanma Oil and Gas Enterprise (MOGE).On Tuesday the US, UK, Australia and Canada announced more Myanmar sanctions, including on the managing director and deputy managing director of MOGE. But they stopped short of sanctioning MOGE itself.Last February the European Union became the first jurisdiction to announce sanctions against MOGE itself in light of the “intensifying human rights violations in Myanmar” and the “substantive resources” MOGE provides the junta.The EU sanctions prohibit European companies from working on Myanmar’s oil and gas field projects. But the US and UK have not yet introduced similar measures and such work – which may involve direct or indirect dealings with MOGE – is not prohibited.Among the findings, the leaked tax documents show that:
    US oil services giant Halliburton’s Singapore-based subsidiary Myanmar Energy Services reported pre-tax profits of $6.3m in Myanmar in the year to September 2021, which includes eight months while the junta was in power.

    Houston-headquartered oil services company Baker Hughes branch in Yangon reported pre-tax profits of $2.64m in the country in the six months to March 2022.

    US firm Diamond Offshore Drilling reported $37m in fees to the Myanmar tax authority during the year to September 2021 and another $24.2m from then until March 2022.

    Schlumberger Logelco (Yangon Branch), the Panama-based subsidiary of the US-listed world’s largest offshore drilling company, earned revenues of $51.7m in the year to September 2021 in Myanmar and as late as September 2022 was owed $200,000 in service fees from the junta’s energy ministry.
    The services provided to Myanmar’s Asia-owned gas field operators by these companies gave vital support to MOGE, which is a major shareholder in all of the country’s most important oil and gas projects.MOGE collects taxes and royalties for the state on gas field projects, ensuring that the junta gets lucrative tax and royalty payments, as well as a vast share of profits. According to the junta’s own figures the oil and gas industry is its biggest source of foreign-currency revenue, bringing in $1.72bn in the six months to 31 March 2022 alone.Yadanar Maung, Justice For Myanmar spokesperson, called the situation “deplorable”.“Oilfield service companies in Myanmar have blood on their hands for operating in an industry that bankrolls the illegal Myanmar military junta, as it wages a campaign of terror against the people,” Maung said.“These companies have breached their international human rights responsibilities and may be complicit in the junta’s war crimes and crimes against humanity by servicing oil and gas projects that fund the junta’s atrocities.”Maung welcomed the latest sanctions but said “far more needs to be done.“So far, only the EU has sanctioned MOGE, which bankrolls the junta. We call on the US, UK, Canada and Australia to follow the EU and also sanction MOGE,” Maung said.Myanmar is one of the poorest countries in Asia but is also rich in oil and gas deposits. The country’s major projects export gas to China and Thailand, with around 20% of the gas retained for domestic use.The major gas projects in which MOGE has significant shareholdings are run by the South Korean corporation Posco International, Thailand’s PTTEP and Gulf Petroleum Myanmar, also from Thailand. Gulf Myanmar Petroleum, PTTEP and Posco were contacted for comment.Map of major oil and gas fields in MyanmarActivists argue that any role played by western gas field contractors in Myanmar’s gas and oil industry after the coup makes them complicit in the junta’s war of aggression. Some legal experts argue the contractors could face future legal issues from their activities in the country.Baker Hughes told the Guardian its contracts were signed before the coup and completed in early 2022. The company said it had not signed new contracts since the coup and had “a very limited number of personnel in the country to support critical safety and operations needs”.Halliburton, Schlumberger and Diamond Offshore Drilling did not respond to repeated requests for comment.Last January, France’s Total and US’s Chevron – which have long been criticised for their roles as gas project operators in the country – announced plans to exit Myanmar.Chevron told the Guardian that it had now sold its 41.1% interest in the Yadana Project to Et Martem Holdings, a wholly owned subsidiary of MTI Energy, a Canadian company.The situation is complicated by the US’s ambiguous stance on MOGE. Myanmar’s state-owned gems, pearl and timber industries have been sanctioned by the US but Washington has not yet tackled MOGE, the linchpin in the junta’s largest single source of foreign revenue.In 2021 the New York Times reported that the oil giant Chevron had led an intense lobbying effort against sanctions that would disrupt oil operations in the country. That report came after the UN’s special rapporteur on Myanmar, Tom Andrews, had told Congress that MOGE was “now effectively controlled by a murderous criminal enterprise” and called on it and other state entities to be sanctioned in order to “meaningfully degrade the junta’s sources of revenue”.Last January, the state department did specifically warn of the dangers of doing business in the country and cited MOGE as particularly problematic. MOGE and other state-owned enterprises “not only generate revenue for a military regime that is responsible for lethal attacks against the people of Burma, but many of them also are subject to allegations of corruption, child and forced labor, surveillance, and other human and labor rights abuses”, it warned.But while the US has put sanctions on the State Administration Council – the junta’s ruling body which controls MOGE through the ministry of energy – it has stopped short of imposing tougher sanctions on MOGE itself. And the US commerce department’s country commercial guide for Myanmar, last updated in July 2022, describes the “dynamic” oil and gas sector as a “best prospect industry” with “significant opportunities for US investors”.The Biden administration is understood to be struggling with a desire to implement stronger sanctions while maintaining good relations with Thailand, a strategic partner, and also a major buyer of Myanmar’s natural gas.Justice for Myanmr’s Maung said the Biden administration’s contradictory approach to Myanmar “has allowed US oil and gas corporations to continue business as usual in Myanmar, enabling the junta’s international crimes”.“While the Department of State has warned that dealing with MOGE risks money laundering, furthering corruption and contributing to serious human rights violations, the US Department of Commerce is advising US companies to seek profits in the oil and gas sectors in Myanmar and to compete for MOGE tenders,” Maung said. “We call on the US to stand with the people of Myanmar by imposing sanctions on MOGE and helping to cut the flow of funds to the junta.”Pressure is mounting on the Biden administration to act. Last year, the Democratic senators Jeff Merkley, Cory Booker, Dianne Feinstein, Edward Markey and Gary Peters wrote to the US treasury urging the Biden administration to impose sanctions to help stem the junta’s brutality, especially by cutting off revenues from MOGE. “MOGE sanctions are one of the most significant actions the United States could take to degrade the junta’s ability to operate,” they wrote.In December, the US House passed the National Defense Authorization Act (NDAA), which included a section outlining action on Myanmar that raised the possibility of Joe Biden imposing sanctions on MOGE but stopped short of issuing a stronger ruling.“At the end of last year, Congress made great progress in authorizing sanctions on Burma’s energy sector, which represents nearly half of the junta’s foreign currency income. The administration must use these authorities and work with regional partners to cut off the junta’s ability to fuel its brutal campaign against civilians,” Merkley told the Guardian.The European Union toughened its stance on MOGE in February 2022, expanding its sanctions against the junta, becoming the first jurisdiction to sanction MOGE itself and prohibiting the provision of technical assistance that directly or indirectly benefits the state-owned entity, with a narrow exemption for decommissioning a project.One European company, Dublin-based Gavin & Doherty Geosolutions, a specialist geotechnical engineering consultancy, secured a contract to work on Thai-owned PTTEP International’s Zawtika development project off the coast of Myanmar, according to August 2021 reports. The contract was announced before EU sanctions were imposed on MOGE but seven months after the coup. Gavin & Doherty declined repeated inquiries about the nature of the contract or whether it was still working in the country.MOGE owns a 20% of Zawtika and profits from the project flow directly to the junta.The tax documents suggest Intermoor, a subsidiary of UK-based Acteon, a subsea services company, also continued to profit from work in Myanmar until at least February 2022. The UK has issued sanctions against some individuals and entities in Myanmar. But like the US, it has so far stopped short of sanctioning MOGE and no UK sanctions prohibit working directly or indirectly with the junta-controlled entity.Filings to Myanmar’s tax authority by Diamond Offshore Drilling indicate it made repeated payments to Intermoor between October 2021 and February 2022 for work done on behalf of Posco International. Posco runs the Shwe gas project, which in 2020 Intermoor had publicly announced it was working on. MOGE has a 15% stake in Shwe, in addition to the revenue it gets from taxes and royalties.A Justice For Myanmar source, verified by the Guardian, has confirmed the presence of InterMoor personnel in Myanmar in 2021 and 2022.Neither Intermoor nor its parent company, Acteon Group responded to repeated requests to comment on this story.Despite US and UK reluctance to target MOGE, environmental lawyers claimed companies working on gas projects in Myanmar still faced legal risks from their activities.Ben Hardman, Myanmar policy and legal adviser at Earthrights, a Washington-based human rights and environmental non-profit, said: “Oil field service companies are not just working with international oil majors, they are supporting joint ventures with MOGE, a government agency that has effectively been taken hostage by the junta. When the companies submit an invoice, the junta ultimately pays a share of them and the support of these companies ensures that the junta can keep seizing revenues that flow through MOGE.“If these companies have an EU presence, they are at severe risk of breaching EU sanctions on MOGE. Companies in the US and the UK also face risks because both governments have sanctioned the junta’s State Administration Council, which controls MOGE’s management and revenues.”TopicsMyanmarMyanmar coupOil and gas companiesSouth and central AsiaUS politicsIrelandThailandnewsReuse this content More

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      Why Joe Biden Must Act on Myanmar

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      Burma, as Myanmar was known then, won its independence from the British in 1948. Since then, bilateral relations between the US and Myanmar can at best be described as lackluster. They have lacked what experts would call “strategic compulsions.” Western allies of the US lack strategic calculus in dealing with Myanmar. They have viewed it from the narrow prism of moralistic Western standards of democracy, human rights, rule of law, corruption and the trafficking of humans, drugs and weapons.

      Myanmar: What Comes Next for Minority Groups?

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      To be fair, the US has not always or entirely been sanctimonious. The historic Kissinger Doctrine integrated China into the liberal postwar order. It facilitated investments into, transferred technology to and trained manpower in China. Under Deng Xiaoping and his successors, China continued its peaceful rise. Xi Jinping, the current Chinese president, has ended that peaceful rise and destabilized the world order.

      Missing Out on Myanmar

      The US approach to Myanmar has been muddled and inconsistent. During the Cold War, Washington was happy to deal with allies in Asia that were military dictatorships. Under President Richard Nixon and Secretary of State Henry Kissinger, the US was happy to deal with a communist regime.

      In contrast, Burma was a parliamentary democracy from 1948 to 1962 when Ne Win led a military coup. For the next 26 years, the country was ruled by the Tatmadaw, the official name of the country’s armed forces. In 1988, nationwide protests broke out. Aung San Suu Kyi, the Oxford-educated daughter of Burmese independence leader Aung San, emerged as the leader of a pro-democracy movement. The National League of Democracy (NLD) went on to win the 1990, 2015 and 2020 parliamentary elections.

      In comparison with China, Myanmar’s regime has been far less oppressive. There is no counterpart to the Great Leap Forward or the Cultural Revolution. The Tatmadaw has yielded to public pressure and held largely free and fair elections. In elections, even members of the Tatmadaw have voted for Suu Kyi’s NLD. Yet the US and its Western allies have ignored the strategic importance of Myanmar in the Indian Ocean region in general and the Bay of Bengal in particular.

      Chinese Influence Wanes and Waxes

      In the past, the US and its allies put pressure on the Tatmadaw by imposing sanctions on Myanmar. Instead of weakening the Tatmadaw, sanctions hurt the people and pushed the country into the arms of China. Between 2004 and 2007, a generational change in the Tatmadaw caused a rethink in Myanmar’s relationship with China.

      The younger officers of the Tatmadaw decided to decrease dependence on Beijing. They tried to reduce Chinese influence in political and military governance. They attempted to transition to some form of democracy and improve relations with the West and neighbors like India. In 2011, US Secretary of State Hillary Clinton swung by Myanmar. President Barack Obama visited twice in 2012 and 2014. By 2016-17, the persecution of Rohingya Muslims, an ethnic minority in the country’s Rakhine state, was in the news and relations between the US and Myanmar were already souring.

      Embed from Getty Images

      Yet this was a relatively good time for the country. Even financial institutions such as the International Monetary Fund and the World Bank opened their purse strings. During this brief honeymoon period with the West, China found itself on the back foot for the first time since 1988.

      In 2011, Myanmar suspended the construction of the Myitsone dam, a controversial hydroelectric project financed and led by a state-owned Chinese company. In 2015, Myanmar’s general elections led to yet another victory for Suu Kyi’s NLD. This was an opportune moment for the West to build relations with Myanmar and counter China. The Tatmadaw had ceded ground to elected officials. Washington could have cultivated both of Myanmar’s centers of power: the NLD and the Tatmadaw.

      But the US missed this opportunity. From 2017, the Rohingya issue clouded Myanmar’s relationship with the West and allowed China to regain its clout in the country. The military coup in February this year strengthens China’s hand further.

      China has already been strengthening its hand by following its tried and tested policy of investing in infrastructure. The China–Myanmar Transport Corridor is connecting the Chinese province of Yunnan to the Bay of Bengal. Roads, railways, river navigation, oil and gas pipelines are deepening economic ties between Myanmar and China. It is part of the Middle Kingdom’s “Look South” policy that seeks to draw Bangladesh, Sri Lanka, Nepal and Pakistan into the Chinese arc of influence.

      The military coup in Myanmar presents a great opportunity to China and represents the first major foreign policy challenge to President Joe Biden’s administration as well as the Quadrilateral Security Alliance, the informal strategic dialogue between the US, Japan, Australia and India known as the Quad.

      The US Still Has Some Cards

      China may be in the ascendant right now, but the West still has clout in Myanmar. Suu Kyi studied at Oxford, lived in the UK for decades and married an Englishman. People from Myanmar have immigrated to Australia, New Zealand, the UK and the US. So, the West commands what Joseph Nye has calls “soft power” in the country. Burmese people want to immigrate not to China but to the US.

      Yet American foreign policy to Myanmar has squandered this soft power prodigally. Obama is the only American president who gave Myanmar the attention it deserved. His foreign policy pivot to Asia was a strategic masterstroke, but Donald Trump abandoned Obama’s outreach not only to Myanmar but the rest of Asia.

      The military coup is a wake-up call for the US to act. China is now firmly in the saddle in Myanmar. The Tatmadaw is finding ferocious resistance on the streets. There is another overlooked problem. Like many postcolonial states, Myanmar is a bewildering patchwork of cultural, ethnic and linguistic groups. Many of them have been fighting for independence or autonomy for years.

      Few in the West realize that a savage conflict might be about to break out. About 20 rebel groups, including the United Wa State Army, Karen National Union, Kachin Independence Army and Arakan Army, control 33% of Myanmar’s territory. Many of them have condemned the coup. In response, the Tatmadaw has launched airstrikes in Karen state. With drugs and arms flush in rebel areas, Myanmar might be about to become the new Afghanistan.

      The Quad leaders’ joint statement on the White House website emphasizes “the urgent need to restore democracy and the priority of strengthening democratic resilience” in Myanmar. This mention is heartening, but the Quad and the US need to do more. Opening dialogue with the Tatmadaw would be a good start. Intelligence sources report that most young officers favor multi-party democracy and are wary of Myanmar turning into a Chinese tributary.

      A carrot-and-stick approach by Washington could still work. The World Bank has halted payments to projects after the military coup. International condemnation has rattled the Tatmadaw. Pressure to reach a political reconciliation might bear fruit. Carrots in the form of infrastructure funding and development assistance could prove attractive. Involving Asian nations such as India, Japan, South Korea and Bangladesh, as well as member states of ASEAN, could pave the path to Myanmar’s transition away from military rule.

      Despite foreign policy blunders, economic woes and internal division, the US is still the undisputed top dog in the world. With the help of its Asian and European allies, Washington can counter China, prevent civil war and restore democracy in Myanmar. The time has come for Biden to act.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Myanmar: What Comes Next for Minority Groups?

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      The military coup in Myanmar has been widely denounced as a lethal blow to a fledgling democracy. But it also increases the likelihood of further atrocities and mass displacement. The world cannot forget that the Myanmar military is the same institution that led the campaign of genocide against the Rohingya people.

      The coup will negatively affect much of the population in Myanmar, rolling back tentative democratic reforms and freedoms and leading to further mass arrests. But ethnic minority groups, which have long been a target of military abuses, have particular reason to be concerned.

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      Even with the veil of a quasi-civilian government in recent years, the military has continued to commit atrocities against the Kachin, Karen, Rakhine and other states inside Myanmar. For the 600,000 Rohingya still living in Myanmar, the threat is even clearer. They survived the military’s genocidal campaign in August 2017. Indeed, the head of the military and now of the country, Senior General Min Aung Hlaing, has referred to the Rohingya as a long-standing problem and an “unfinished job.”

      The coup will also affect refugees outside of the country. The more than 1 million Rohingya living in Bangladesh now face even greater odds against a safe return to their homeland in Myanmar. In a way, the coup only underscores the reality that conditions for return have been far from safe and sustainable all along.

      Rohingya in Bangladesh have told Refugees International that they are alarmed by the coup and worried about the fate of loved ones still in Myanmar. At least with the quasi-civilian government, there was some hope that international pressure could eventually inspire a change. But as long as the military — the entity responsible for the genocide — remains in charge, the idea of a safe return seems inconceivable.

      International Pressure on Myanmar

      If there is a silver lining, it is that the newly galvanized international outrage about the coup might break the inertia in addressing the military’s abuses. In a report released in January 2021, Refugees International laid out critical policy advice for the Biden administration to address the Rohingya crisis. The report recommendations also provide a playbook for responding to the coup.

      As a first move, the Biden administration must recognize the crimes committed by Myanmar’s military for what they are: crimes against humanity and genocide. Given the ample evidence available, it is perplexing that the United States and many other countries have not yet made this determination. A genocide declaration would not only speak truth to power about what the Myanmar military has done to the Rohingya, but it would also galvanize more urgent global action. It would signal how serious the US and other allies take the threat of the Myanmar military.

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      Second, the Biden administration should use the urgency of the coup and a genocide determination to engage allies and lead a global response marked by diplomatic pressure and coordinated targeted sanctions. The Biden administration has already said it is considering new sanctions and is reaching out to other countries to coordinate. Those sanctions should be placed both on Myanmar’s military leaders and military-owned enterprises, including, but not limited to, the two large conglomerates, the Myanmar Economic Corporation (MEC) and Myanmar Economic Holdings Limited (MEHL). Future lifting of sanctions should be phased and tied not only to a return to the quasi-civilian government elected in 2020, but also progress on creating conditions conducive to the return of Rohingya refugees.

      Third, the US and other allies must push for a multilateral arms embargo. Ideally, this would be done through the action of the UN Security Council. But as long as China and Russia are likely to block such actions, countries like the United States and European Union members that have already ended arms sales to Myanmar should use diplomatic pressure to urge others — including India, Israel and Ukraine — to do the same.

      Fourth, countries must revitalize support for international accountability efforts, including at the International Court of Justice (ICJ) and the International Criminal Court. The Gambia’s genocide case against Myanmar at the ICJ has the support of the 57-member Organization of Islamic Cooperation, and Canada and the Netherlands have expressed their intent to intervene in the case. The US and other allies should add their support.

      Finally, the United States and other allies must push for coordinated high-level diplomatic pressure at the UN Security Council, even with Chinese and Russian reluctance to allow stronger measures. As an important first step, the Security Council did issue a statement that expressed concern about the coup and called for the release of detainees; however, it fell short of outright condemnation of the coup and did not commit to any concrete action. Nonetheless, a discussion at this highest level still adds pressure on Myanmar’s military by keeping the possibility of stronger action alive. The fact that there had been no UN Security Council session on the Rohingya for the past two years is ludicrous and only fueled the Myanmar military’s impunity.

      Ethnic minority groups in Myanmar know all too well that the military is capable of — and willing to execute — mass atrocities. The US and all states that stand for democracy, and against mass atrocities, must act now while the eyes of the world are on Myanmar.

      *[Daniel Sullivan is the senior advocate for human rights at Refugees International.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More