Total Will No Longer Pay Dividend Payments For Myanmar Pipeline, Resulting in Myanmar Military Losing Millions of Dollars

According to a report by Total, a gas pipeline company owned by the Myanmar Oil and Gas Enterprise (MOGE) of Myanmar could lose tens of millions of dollars after dividend payments were halted.

As part of the suspension of cash distributions to shareholders of Moattama Gas Transportation Company (MGTC), Total, the project’s operator and biggest shareholder, confirmed it was suspending distributions to MGTC shareholders.

Since MOGE is a state-owned company, it has been under the control of the generals since the coup. It owns 15% of MGTC.

Chevron, a major US oil company that also owns a stake in MGTC, and Total were under heavy pressure when they announced the shock decision.

In recent campaigns, extractive industry giants have been urged to withhold all gas revenue payments to the junta.

Natural gas is piped from Yadana off the coast of Myanmar to Thailand and Yangon by MGTC and the company is extremely profitable.

MGTC, a Bermuda tax haven, kept its financial details secret for two decades until they were obtained earlier this year by Distributed Denial of Secrets, an organization dedicated to transparency.

Justice for Myanmar, together with Finance Uncovered, the UK-based journalism organisation, analyzed MGTC’s accounts and discovered that the company was so profitable that it was able to distribute dividends worth an enormous $872.8 million in the three years to 2019.

With a 15% stake in MGTC, MOGE received $130.9m during that period – or an average of $43.6m per year.

The flow of money to MOGE has been halted.

The financial impact of the move is not yet clear. Total said that the suspension began last month, which is the start of the new financial year in Myanmar. Dividends are normally paid in the middle or at the end of a financial year.

By suspending pipeline dividends, the junta won’t lose other, bigger, gas revenue flows, such as Myanmar’s share of sales revenues, royalties, and corporate income tax payments.

Moattama’s decision by its shareholders, which also includes PTTEP from Thailand, could set a precedent for other natural gas projects and international businesses in partnership with Myanmar state entities.

It would cause the military generals considerable economic difficulties.

To avoid disrupting Myanmar and Thailand’s vital electricity supply, Total said it will endeavor to preserve the production of gas in accordance with applicable laws.

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