Thai PTTEP Set to Take Over Myanmar's Biggest Offshore Gas Field as Oil Majors Exit

January 26, 2022

Yadana Platform (Myanmar) - Credit:Gladieu Stephan - TOTAL
Yadana Platform (Myanmar) - Credit:Gladieu Stephan - TOTAL

Thailand's state oil and gas explorer looks set to take over Myanmar's biggest gas field, as TotalEnergies and Chevron Corp exit in the wake of last year's coup in the Southeast Asian state, analysts say.

A move by PTT Exploration and Production Pcl (PTTEP) to become operator of Yadana field, in which it already has a 25.5% stake, would keep vital gas supplies flowing to Thailand and Myanmar, and could safeguard revenues for Myanmar's government amid tighter U.S. and other sanctions.

France's TotalEnergies and U.S. firm Chevron said on Friday they were leaving, citing the worsening humanitarian situation following the coup.

The French and U.S. firms were part of a group operating the Yadana gas project off Myanmar's southwest coast and the Moattama Gas Transportation Company (MGTC) that runs a pipeline carrying gas from the field to Myanmar's border with Thailand.

"PTTEP appears the more likely candidate to take over as operator of Yadana," said Kittithat Promthaveepong, Bangkok-based consultant at the Lantau Group.

PTTEP would have an 85% stake in Yadana if it took all the shares held by TotalEnergies and Chevron.

PTTEP already operates Myanmar's smaller Zawtika field, in which it has an 80% stake and Myanmar's state energy firm Myanma Oil and Gas Enterprise (MOGE) holds 20%.



PTTEP said on Friday it was "carefully considering" its next steps regarding Yadana and how to maintain energy supplies for Thailand and Myanmar. PTTEP declined to comment further on Monday.

MOGE did not immediately respond to a request for comment.

TotalEnergies said on Friday that PTTEP would be a "natural" choice for its Myanmar assets and said it was in contact with the Thai firm. Chevron declined to comment.

Equity holders usually have the first right to decide if they want to take over stakes from their partners.

Rystad Energy analyst Readul Islam also said PTTEP was the most likely candidate to take over Yadana and said, if it went ahead, PTTEP would operate more than half Myanmar's gas supply.

Yadana produced 770 million cubic feet per day (mmscfd) of gas in 2021, with about 570 mmscfd of that supplied to Thailand and the rest used to generate Myanmar's electricity.

Yadana accounts for 10%-15% of Thailand's gas demand and is vital for Thailand's energy security as production at the biggest Thai field Erawan tumbled in 2021.

But looming sanctions on the oil and gas industry could drive more international firms out of Myanmar, leaving regional players with historical ties such as PTTEP to continue, said Saloni Kapoor, a research analyst at Wood Mackenzie.

(Reporting by Florence Tan in Singapore and Chayut Setboonsarng in Bangkok; Editing by Edmund Blair)



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