PERTH (miningweekly.com) – Australian energy producer Woodside on Thursday announced its withdrawal from Myanmar.
The ASX-listed company has operated in Myanmar since 2013, conducting multiple exploration and drilling campaigns, and holds a 40% participating interest in the A-6 joint venture (JV) as joint operator and participating interests in exploration permits AD-1 and AD-8.
Woodside previously announced that it was placing all Myanmar business decisions under review following the State of Emergency declared in February 2021 and the deteriorating human rights situation in the country. During 2021, the company completed the relinquishment of exploration permits covering offshore Blocks AD-2, AD-5 and A-4 and is in the process of withdrawing from Blocks AD-6, AD-7 and A-7.
Woodside told shareholders this week that it will now commence arrangements to formally exit Blocks AD-1 and AD-8, the A-6 JV and the A-6 production sharing contract (PSC) held with the Myanmar Oil and Gas Enterprise (MOGE).
The non-cash expense associated with the decision to withdraw from Blocks A-6 and AD-1 is expected to impact 2021 net profit after tax (NPAT) by approximately $138-million. This is in addition to the $71-million exploration and evaluation expense for Block AD-7 disclosed in the company’s quarterly report for the three months to December.
Woodside said that these costs will be excluded from underlying NPAT for the purposes of calculating the dividend.
Woodside CEO Meg O’Neill said while Woodside had hoped to develop the A-6 gas resources with its JV participants and deliver much-needed energy to the Myanmar people, there was no longer a viable option for Woodside to continue its activities.
“Woodside has been a responsible foreign investor in Myanmar since 2013 with our conduct guided by the UN Guiding Principles on Business and Human Rights and other relevant international standards.
“Given the ongoing situation in Myanmar we can no longer contemplate Woodside’s participation in the development of the A-6 gas resources, nor other future activities in-country,” she said.