Myanmar National Oil Company was sanctioned, and holding companies Total, Chevron and Petronas have withdrawn from Myanmar gas fields

The EU has imposed sanctions on several senior officials in Myanmar and the state-owned Myanmar Oil and Gas Enterprise (MOGE), mainly for funding the military that overthrew the democratically elected government in February 2021.

MOGE is a partner of Myanmar gas fields such as Yadana and Yetagun. Operators and joint ventures including France's TotalEnergies, Petronas and U.S. Chevron have announced their withdrawal from the field.

About half of Myanmar's foreign exchange comes from gas revenue, and MOGE is expected to generate more than $1 billion in revenue from offshore and pipeline projects in 2021-2022.

The EU said it was deeply concerned about the continued escalation of violence in Myanmar and the evolution into a long-term conflict with regional implications. The situation has continued to deteriorate significantly since the military coup last year.

Following TotalEnergies, Chevron, Woodside Petroleum and Shell, Malaysia's National Exploration and Production Corporation and Yeda Port operator Petronas Carigali are the latest heavyweights to exit Myanmar's upstream sector.

Myanmar produces 1.6 billion cubic feet of gas per day in 2021, about 50 percent of which is operated by Total.

Both the French company and Chevron have stakes in Myanmar's largest production project, Yadana, which includes the Yadana, Badamyar and Sein fields.

The Yadana project's production has been around 700 million to 750 million cubic feet per day over the past five years, with a 2021 output of about 282.5 billion cubic feet.

Total has been operating the field since it started in 1998. The exit of these supercompanys may make it harder for the next operator to maintain production, and may also require additional investment

Many analysts and market watchers believe that Thailand's PTTEP may acquire interests in TotalEnergies and Chevron's Yadana, mainly because the company relies heavily on the field to pipe gas to PTT for power generation in Thailand.

Three-quarters of Yadana's output is allocated for export to Thailand, as is the Yetagun field operated by Petronas.

But Yetagun's production is declining, and last year the field was closed for several months and totaled less than 1.77 billion cubic feet.

Meanwhile, PTTEP produced 116.5% of BCF natural gas from the ZaTika field offshore Myanmar in 2021, of which 66% was also exported to Thailand.

However, it is not only the future of Myanmar's existing producing assets that could be affected by the departure of heavyweights - that raises the question of when or whether discovered resources can still be mined.

Previously announced exits by IOCs TotalEnergies, Chevron, Woodside and Shell will affect resource companies in excess of 500 million barrels of oil equivalent, most of which are in the life cycle before final investment decisions.

At present, Australia's Woodside has the highest share, about 270 million barrels of equivalent, and the project is still in the pre-FID stage.

TotalEnergies has about 200 million barrels of oil equivalent resources, of which about 60% are in the pre-FID stage, while Chevron has about 60 million barrels of oil equivalent, all of which are in the production life cycle.

The ultra-deepwater A-6 gas project in Myanmar, jointly invested by TotalEnergies, Woodside and MPRL, has a resource of over 330 million barrels of oil equivalent and an expected investment of US$2 billion, a highly anticipated approval.

Before the COVID-19 outbreak, the A6 project was expected to enter the front-end engineering and design phase by the end of 2020, with production expected to start in 2025, but the plans couldn't keep up with the changes, and all expectations came to nothing with the departure of major companies.

It is one of the top five deepwater projects in Southeast Asia to be approved in 2030 and is expected to be one of the top five deepwater gas projects to be approved by TotalEnergies globally by the end of the century.

The project is important for Myanmar as it will account for 20 to 25 percent of the country's natural gas production by 2035.

With the exits of Woodside and TotalEnergies, the project will be at risk as MOGE seems unlikely to find a buyer for the project.

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