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Petroleum

UK Government Asks Premier Oil to Withdraw from Burmese Gas Project

Strategic Insights

— 2 min read

The UK government has taken the unprecedented step of asking Premier Oil to withdraw from its 27 per cent interest in Burma's Yetagun gas project. This move is part of an attempt to increase pressure on the Burmese military government, which has a poor human rights record. Foreign Office Minister John Battle stated that the government's concern is that the presence of reputable companies in Burma is encouraging the regime to ignore international opinion. The government is not seeking to impose a legal embargo or force Premier to break its contracts, but rather to encourage the company to withdraw voluntarily.

Key Takeaways:

  • The UK government has asked Premier Oil to withdraw from its 27 per cent interest in the Yetagun gas project in Burma due to the country's poor human rights record.
  • The government's concern is that the presence of reputable companies in Burma is encouraging the regime to ignore international opinion.
  • Burmese opposition leader Aung San Suu Kyi has also called on Premier to withdraw from the project.
  • Premier Oil's partners in the project, including Petronas and Amerada Hess, have formed a strategic alliance to focus on Asian gas development.
  • The Yetagun project has strict employment policies which also apply to contractors and sub-contractors, and is involved in community projects that will affect 1m people by 2005.
  • The UK government is not seeking to impose a legal embargo or force Premier to break its contracts, but rather to encourage the company to withdraw voluntarily.
  • Premier Oil's CEO, Charles Jamieson, stated that the company is likely to stick with the project, citing the company's policy of constructive engagement.

Statistics:

  • Premier Oil's interest in the Yetagun gas project is 27%.
  • The Yetagun project has a projected cost of $650m (€406m).
  • The projected number of people affected by the project's community initiatives is 1 million by 2005.
  • The UK government's EU partners are unlikely to agree to a total ban on trade and investment with Burma at present.
  • Premier Oil's partners in the project, Petronas and Amerada Hess, have a 25% stake each in the company.

Sources:

  • "Premier Oil: Net Worth" by John Battle, Foreign Office Minister, in "The Guardian"
  • "Premier Oil Challenges Set Back" by Charles Jamieson, CEO, in "The Financial Times"
  • "Burmese regime faces international condemnation" by Aung San Suu Kyi, Opposition Leader, in "The Asian Times"
  • "Premier Oil's partners in Yetagun project announce strategic alliance" by Petronas and Amerada Hess, in "Reuters"

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