EU imposes new Burma sanctions, targets state oil firm

The EU has imposed fresh sanctions against Myanmar's (Burma) armed forces, targeting state-owned Myanmar Oil and Gas (Moge), a major source of revenue for the military junta that seized power a year earlier.

The new restrictive measures, which include asset freezes, travel bans and a prohibition against making available funds, also target 22 officials, including government ministers and members of the country's Union Election Commission. Other companies such as state-owned Mining Enterprise 1 (ME 1) and private-sector conglomerates Htoo and the International Group of Entrepreneurs (IGE) are also included in the new sanctions list for "providing substantive resources" or being "closely connected" to the military, which seized power in a coup on 1 February 2021.

Oil operator and service provider Moge is the regulator of the oil and gas sector and owns stakes in Myanmar's large offshore natural gas fields — Yadana, Yetagun, Zawtika and Shwe. The state-owned firm grants permits and collects tax on profits made by private-sector companies with which it has production-sharing contracts or joint ventures, the EU said. The firm also oversees oil and gas exploration and production, domestic gas transmission and the distribution of oil products, the EU added.

ME 1 similarly acts as a regulator of the non-ferrous metal sector, granting permits and collecting tax on profits made by private-sector firms. The IGE is active in key infrastructure industries, including energy and agriculture.

The new EU sanctions were added to the bloc's 2013 regulation setting out restrictive measures against Myanmar's leaders. The move comes after TotalEnergies, Chevron and Australian independent Woodside announced last month that they would pull out of critical gas projects in Myanmar. But Australian foreign minister Marise Payne indicated earlier this month that Canberra has no plans to follow the EU and the US in tightening sanctions against Myanmar.

The EU has also introduced a wind-down derogation to allow member states to authorise the release of frozen funds for decommissioning oil and gas wells, safety and environmental restoration, salaries and social benefits to employees to avoid any unintended consequences arising from the new sanctions. The derogation can also be made for the transfer, before 31 July 2022, of shares or interests necessary to terminate contracts concluded before 21 February 2022.

By Dafydd ab Iago