Chevron Lobbies to Head Off New Sanctions on Myanmar

Chevron, the United States’ second-largest oil and gas producer, has a long history of investing heavily in Washington influence. Credit...Jonathan Bachman/Reuters

The oil company is arguing against efforts to restrict its involvement in a gas operation in Myanmar that provides funding for the junta there.

The Myanmar military’s coup and brutal crackdown on dissent have left it with few allies in the West. But one of the most sophisticated corporate lobbying operations in Washington has mobilized to head off intensifying pressure on the Biden administration to impose broad sanctions against the state-owned oil and gas company helping to finance the junta.

Chevron has dispatched lobbyists — including some former federal government officials, one of whom appears to have left the State Department just last month — to agencies including the State Department and key congressional offices to warn against any sanctions that might disrupt its operations in Myanmar, according to four people familiar with the lobbying.

The California-based oil and gas giant says sanctions could endanger the long-term viability of a big Myanmar gas field in which it is a partner, risk worsening a humanitarian crisis for people who rely on the operation for power and expose the company’s employees to criminal charges.

Chevron, the second-largest oil and gas producer in the United States, has a longstanding relationship with Myanmar Oil and Gas Enterprise, or MOGE, a state-owned company that is closely connected to the military generals who seized power from elected leaders on Feb. 1. Since then, the military has killed an estimated 740 citizens of Myanmar and detained thousands more.

Influential Democrats, diplomats and human rights activists are increasingly pressing the administration to impose sanctions on the state-owned company, which a United Nations human rights investigator told Congress last month “is now effectively controlled by a murderous criminal enterprise.”

One of the military’s largest sources of revenue, bankrolling up to 70 percent of its operations in years past, according to analysts, is a gas field known as Yadana. The field has been operated since the 1990s by the French energy company Total S.A. in partnership with a Thai-owned oil and gas company, Myanmar’s state-owned company and Chevron.

This year, Myanmar Oil and Gas Enterprise is expected to collect at least $536 million worth of gas and revenue from the operation of the Yadana field, according to estimates by EarthRights International, a nonprofit group that has analyzed Myanmar’s gas revenues based on publicly available information.

Additionally, Chevron and its partners in the Yadana project pay taxes to the government in Naypyidaw to be able to operate in Myanmar — at least $120 million in 2018, according to EarthRights, which supports the sanctions and which joined dozens of human rights organizations last month in urging Chevron to withhold payments to Myanmar’s state-owned oil and gas company.

After taxes and other payments to the Myanmar government, Chevron has been netting annual profits of $100 million to $150 million from its stake in Yadana and a pipeline company that transports the gas from Myanmar to Thailand, experts at EarthRights estimated.

“This is a huge source of hassle-free cash that the regime gets right now,” said Marco Simons, the general counsel for EarthRights, who has tracked gas revenues in Myanmar for more than a decade.

In one of its first major foreign policy declarations, the Biden administration in early February swiftly declared the military takeover a coup d’état, prompting restrictions on American aid and setting in motion about a half-dozen rounds of sanctions so far against the junta’s leaders, army units, and gemstone companies and other state-owned financial enterprises.

The administration announced additional sanctions on Wednesday against Myanmar’s state-owned timber and pearl industries, whose exports generate what a senior Treasury Department official called “significant funding” for the military.

Now President Biden and top officials at the State and Treasury Departments are facing mounting calls from congressional Democrats, the United Nations and human rights groups to levy sanctions that could restrict or cut off the ability of Chevron and other Western companies to continue doing business with Myanmar’s state-owned energy company.

The Treasury Department declined to comment on Chevron’s lobbying or the possibility of new sanctions targeting Myanmar’s oil and gas sector.