Petronas interested in Texaco's Myanmar stake

Petronas interested in Texaco's Myanmar stake

KUALA LUMPUR (Reuter): Malaysian national oil firm Petronas is
studying the purchase of Texaco Inc's 42.9 percent stake in
Myanmar's Yetagun gas field, president and chief executive Hassan
Marican said yesterday.

Texaco is the largest shareholder and operator of the field,
which has estimated gas reserves of one trillion cubic feet and
lies 125 miles off Myanmar's western coast in the Indian Ocean.
It is being commercially evaluated.

Marican said Texaco had appointed an investment banker to look
for buyers of the U.S. oil giant's stake.

"We have been approached by the investment banker. Yes, we are
looking and studying the opportunity," he told reporters on the
sidelines of an industry conference in Kuala Lumpur.

Texaco has said it might sell the stake.

Earlier this year, the United States imposed sanctions to
protest what it called political repression by the ruling
military junta, banning fresh investment in Myanmar by U.S.
companies.

U.S. firms have been under pressure to withdraw from Myanmar
by human rights activists. High profile names which have pulled
out of Myanmar include U.S. soft drinks giant PepsiCo Inc.
But oil companies have also faced particular pressure because
they tend to be the biggest investors in Myanmar.

Unocal Corp has a 47.5 percent stake in the US$1.2 billion
Yadana field, which plans to pipe gas to Myanmar and Thailand.

Texaco's Yetagun field is due to come on stream in 1999 and
the consortium has already signed a 30-year deal to sell 200
million cubic feet per day of gas to Thailand.

At Texaco's annual shareholder meeting in May, the company
said it might sell the Yetagun stake, citing financial rather
than human rights concerns.

Later the same month, the U.S. Treasury's Office of Foreign
Assets Control (OFAC) said existing contracts entered into by
U.S. companies in Myanmar could proceed.

There are around 20 U.S.-based companies with direct
investment or employees in Myanmar. The largest are Unocal,
Texaco and Atlantic Richfield Co, the Washington-based Investor
Responsibility Research Center said in May.

Oil companies have generally argued that unilateral sanctions
have not worked in the past and the best way to promote change is
through investment.

The U.S. efforts to raise human rights to the top of the Asian
agenda received a severe blow earlier this month when the
Association of South East Nations (ASEAN) decided to accept
Myanmar, Cambodia and Laos as full members.

They are scheduled to join Brunei, Indonesia, Malaysia, the
Philippines, Singapore, Thailand and Vietnam as members of the
grouping at a summit in Kuala Lumpur next month.