Norway’s Seadrill Under Fire for Burma Project

The Norwegian offshore drilling firm Seadrill has come under renewed scrutiny from activists for conducting offshore drilling activities in Burma.

According to Burma’s state owned the New Light of Myanmar, Seadrill’s new ‘jack-up’ rig, the West Juno, was set to arrive in Burmese waters in mid-January to commence drilling for PTTEP, the international exploration wing of Thailand’s state-owned oil firm which holds concession in blocks M-7 and M-3 for a 4 month period.  PTTEP presently owns a 100 percent stake in both blocks.

While Norway’s government discourages Norwegian companies from doing business in Burma, Oslo has not banned firms from doing so. 

Reached for comment, the Norwegian Burma Committee sent Mizzima a statement in which the organization’s director, Inger Lise Husoy, criticized Seadrill’s actions and its involvement with PTTEP in Burma. 

Husoy told Mizzima: ‘It is well documented that the oil and gas sector in Burma involves grave human rights violations. If Seadrill was not aware of that before, they were certainly informed about the situation after the last time they operated in Burma. That Seadrill now chooses to enter a new contract for operations in Burma confirms the image of the company which seeks profit at the expense of people’s rights and lives’.

According to the latest figures available through Seadrill’s US regulatory filings, Norway’s public pension plan is the second largest shareholder in Seadrill.

As of March 2010, the pension fund whose shares are managed by Folketrygdfondet, controlled a 7.42 percent stake in the firm.

Matthew Smith, a researcher with the human rights organization Earth Rights International (ERI), told Mizzima, ‘Seadrill will bear responsibility for human rights impacts of the overall project, and by virtue of the Norwegian government’s holdings in Seadrill, the people of Norway have a stake in this and have reason to be concerned’.

In December, ERI issued a report critical of the Norwegian state pension plan of being ‘complicit in land confiscation’ and other abuses of the Burmese military regime

ERI has long been critical of PTTEP, Chevron and Total oil companies for paying the Burmese regime and its armed forces to provide security services in the areas where their gas pipelines run. According to ERI, the regime has forced local villagers to perform unpaid construction on infrastructure that benefits the foreign companies. 

ERI sued UNOCAL, Chevron’s predecessor in Burma, on behalf of Burmese villagers for its involvement in the construction of the notorious Yadana pipeline. PTTEP has a 25.5 percent stake in the consortium that runs the Yadana project. ERI says the nearby Yetagun pipeline was built using the same practices as Yadana. PTTEP has a 19.31 percent stake in the consortium that runs the Yetagun project.

Gas from Seadrill wells expected to be sent via pipelines

ERI is also concerned that construction of PTTEP’s new Zawtika pipeline which will send gas from the M9 Block in the Andaman Sea to Thailand will lead to added human rights abuses for local villagers.  According to the latest ERI report, construction of this project is already underway.

PTTEP has also indicated that gas from both the M-3 and M-7 blocks where Seadrill’s West Juno is now conducting its operations, will also be sent to Thailand via pipeline and it is expected that this will also be sent via Zawtika. 

Seadrill previously drilled an exploration well in the M-7 block for PTTEP in 2008.

PTTEP’s new gas operations will give billions more in royalties to the military regime.  ERI estimates that the regime earned more than US$ 5 billion from the Yadana and Yetagun projects from 1998 to 2009.

Activists say Seadrill attempted to hide Burma job from shareholders

In addition to raising concerns by working for PTTEP in Burma, Seadrill’s critics are also concerned by what they call Seadrill’s lack of transparency when it comes to working in Burma.

Wong Aung, an activists with the Shwe gas movement, said that Seadrill’s regulatory filings with the US government do not clearly state their Burmese involvement.  A glance through several years of Seadrill’s regulatory filings shows that it is routine practice for Seadrill when describing the specifics of its various drilling contracts to disclose the country where such contract took place or is set to occur. 

When it came to Burma, however, things were not as clear. Seadrill’s June 2010 6K filing with the US securities and exchange commission (SEC) detailed the firm’s work for Australia’s Twinza oil in the Andaman sea without mentioning what country’s territory this project took place in.  

Seadrill’s work for Twinza was also described in the firm’s 2010 first quarter report available in a pdf  on the Seadrill website as follows: ‘In mid-March, the jack-up rig West Triton commenced a 30-dayassignment for Twinza in the Andaman Sea’, again without mentioning that this took place in Burmese waters (neither Burma or the official name Myanmar was used in either document). 

Seadrill’s practice of omitting the specific country where the Twinza contract took place is in sharp contrast to all the other contracts discussed in the report.

According to Wong Aung, “When Seadrill states in their reports  that their work for Twinza was in the Andaman Sea but leaves out what county’s waters they are doing this in, this isn’t a mistake. They are trying to hide from their shareholders, the public and the Norwegian government that they are doing business in Burma, notorious for its brutal military regime and repeatedly ranked as one of the most corrupt places in the world’.   

News of Seadrill’s work for Twinza only became known to Burma activists on March 21, 2010, when the Burmese junta issued a warning in state-controlled media ordering fisherman to stay at least 4 km away from the West Triton when it was doing its drilling work. 

Seadrill’s spokesperson did not respond to Mizzima’s request for comment on this story.

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