Too early to say: Coleman on Myanmar coup

DESPITE suggestions the military coup in Myanmar could hit up to US$2 billion worth of project sanctions out to 2023, outgoing Woodside Petroleum chief Peter Coleman told Energy News it’s still too early to predict anything. The company is midway through an offshore campaign in the north of the country. 
Too early to say: Coleman on Myanmar coup Too early to say: Coleman on Myanmar coup Too early to say: Coleman on Myanmar coup Too early to say: Coleman on Myanmar coup Too early to say: Coleman on Myanmar coup

Helen Clark

Editor

 
"It's very early days in the coup, the military has committed to free and fair elections in 12 months," he said after full year results and an earnings call today. 
 
"It's not up to us to judge the veracity of grievances they have around the previous election process.
 
"I understand they've put together quite an extensive folder of grievances around the election that they wanted to be heard and they weren't being heard. They were pushed up against a difficult decision point, the day of the coup was the day the new parliament was due to proceed."
 
Then, the military or Tatmadaw, arrested many elected leaders including Aung San Suu Kyi and installed its own chosen generals in a move widely condemned globally including by Canberra
 
He said Woodside was watching the demonstrations closely, but the campaign would finish on schedule in three to four weeks. 
 
After the coup, Energy News revealed the replacement drill crew's arrival in Yangon from Perth had been delayed by a week, leaving rig workers on an eight-week hitch after a prior week's delay. 
 
Coleman told Energy News today that a crew had been flown in via charter.
 
"We had a charter flight in there last week and a crew that will go offshore.They're in 14 day quarantine in a hotel in Yangon. The crew change will be late next week," he said, confirming the additional week. 
 
"We are concerned about fatigue in the workforce which is why we made this decision to send a charter in there." 
 
However a Woodside spokesperson said charters had been common practice since COVID-19 began. 
 
In early February after the coup Wood Mackenzie and its geopolitical peer Verisk Maplecroft estimated there is as much as $2 billion worth of upstream projects out to 2030 yet to take sanction, which includes this Woodside project and the A6 ultra deepwater block it shares with Total. Gas from A6 is destined for the tightening local market and neighbouring Thailand. 
 
Woodside has stakes in nine blocks and is midway through a three-well drill campaign, but rarely publicises its work there, which analysts regard as non-core to the company's immediate aims. 
 
However Coleman said he didn't believe the coup had created any new sovereign risks or would lead to sanctions on the country (apparently mishearing an Energy News question regarding project sanctions). 
 
"I think you'll find in my view other Western governments will be reluctant to put up very harsh sanctions in place. Myanmar has made good progress in moving to democracy, the last thing they'd want is to push them away from that, potentially towards China," he said. 
 
China's CNPC is partner in two of the three blocks in this campaign. 
 
Continuing on the China theme he reconfirmed that Woodside had been talking to Chinese companies keen for offtake from the Scarborough field. 
 
"They're very clear that relations between the Australian and Chinese governments must improve before they're able to finalise those negotiations," he said. 
 
Woodside has 50% of gas contracted and plans to sell a portion on the spot market. Its development concept was scaled up from 6.5 million tonnes per annum to 8MMtpa last year. 
 
He doesn't see a new direction under a Joe Biden administration either, when it comes to material things like trade imbalances but has also noticed more nuanced rhetoric from the White House. 
 
China remains a key customer for Woodside and one likely to take a decent portion of Coleman's predicted 4% per annum global growth in LNG demand.
 
Outside of that, the company remains fixed on traditional partners Japan and South Korea. In the former's case several contracts are coming off in the next five to 10 years while Korean demand is predicted to rise. 
 
Frontier markets include Thailand and Vietnam, which he visited 18 months ago. 
 
"Clearly Vietnam is one of those, I was part of a delegation with the Prime Minister, we've been looking at. The Vietnamese have proven they're capable of getting these projects (import terminals) approved."