Unocal still in Burma

For all the opprobrium being directed at China over its support for the repressive Burma regime, the US corporate presence is going unexamined. As we recently noted, the new Burma sanctions announced by Bush mean no more than a visa ban on some members of the junta, and the freezing of assets of some figures linked to the regime. (DPA, Sept. 24) None of the US sanctions enacted since the bloody junta took power in 1988 have interfered with Unocal's operations in Burma—which continue to this day.

After the annulled elections of 1990, Congress passed the Customs and Trade Act, enabling the president to impose sanctions against Burma—which then-president George HW Bush declined to do. In 1997, President Clinton finally did so—but with a loophole allowing those firms who were already in Burma before 1990 to remain. The 2003 Burmese Freedom and Democracy Act barred Burmese imports, but still failed to move against US corporations grandfathered in under the existing law. (See the US State Department's "2005 Investment Climate: Burma" and the free-market Cato Institute's anti-sanctions factsheet, "US Sanctions Against Burma: A Failure on All Fronts")

The Texas-based Unocal in 2003 completed construction of a pipeline to export gas from Burma's Yadana fields to Thailand. The pipeline cuts right through the territory of the Karen and Mon tribal peoples, the target of ethnic cleansing campaigns by the Burmese regime. In 2004, Unocal settled in a case brought under the US Alien Tort Claims Act charging the company was complicit with forced labor and other rights abuses. (Radio Free Asia, Dec. 18, 2004) In 2005, Unocal's French partner Total agreed to compensate victims to the tune of 6 million euros ($7.2 million), paid into a fund for humanitarian projects. (EarthRights International, Nov. 29, 2005) The Yadana pipeline is functioning today—and being protested by global ecologists for its impacts on the sensitive rainforest regions it cuts through. (QatarGulf Times, Sept. 4, 2007)

In 2005, in the midst of the Yadana controversy, Unocal was bought out by the industry giant Chevron to the tune of $17.5 billion. The merger came after a bid to buy the firm for a higher price by the China National Offshore Oil Company was scuttled by Congressional action. Unocal's interests in Burma and especially the Caspian Basin were the key goad in the contest. The affair was openly portrayed as a US-China race for access to Asia's hydrocrabon resources.

Rights groups continue to protest the US corporate presence in Burma, but (in contrast to the China angle) it isn't making the headlines. Writes the German news agency DPA, Oct. 2:

Companies doing business in Myanmar should condemn the country's ruling junta and shut down their operations in the wake of a brutal crackdown on peaceful protests, the New York-based Human Rights Watch said on Tuesday.

"Companies doing business in Burma argue their presence is constructive and will benefit the Burmese people, but they have yet to condemn the governments abuses against its own citizens," said Arvind Ganesan, director of the Business and Human Rights Program at Human Rights Watch…

"Gas exports accounted for fully half of the country's exports in 2006," said HRW. "Burma's gas business brought in revenue of 2.16 billion dollars in 2006 from sales to its main buyer, Thailand," it claimed.

Thailand is the main buyer of Myanmar's natural gas fields in the Gulf of Martaban owned by Total of France, US-based Chevron and PTTEP of Thailand.

Myanmar's natural gas exports account for almost 30 per cent of Thailand's gas usage, industry sources said. Sources familiar with Myanmar's oil industry estimate the junta's earnings off gas sales was closer to 1 billion dollars last year, but this would still make gas revenues its highest source of income.

Current investors in Myanmar's oil and gas industry include companies from Australia, the British Virgin Islands, China, France, India, Japan, Malaysia, Singapore, South Korea, Thailand, Russia, and the United States (providing they got in before 1990).

From the Burma Campaign UK's "Dirty List" of companies that support the Burma regime:

Since its 2005 takeover of Unocal, US oil giant Chevron has been one of the joint venture partners developing the Yadana offshore gas field in Burma, which earns the military regime millions of dollars. Chevron also owns Texaco…

In response to calls from Burma’s democracy movement, the Burma Campaign UK and other campaign groups around the world have been pressuring companies to sever business ties with Burma.

Please contact one or more of the companies on the Dirty List and ask them to cut their ties with Burma’s military government. If appropriate, tell them you will not purchase their products as long as they continue to support the regime in Burma.

Give 'em a piece of your mind (politely, of course):

David J. O'Reilly
Chairman and CEO
6001 Bollinger Canyon Rd.
San Ramon
CA 94583

See our last posts on Burma and the global struggle for control of oil.

  1. Unocal and Texas

    Union Oil Company of California, dba Unocal was never based in Texas.

    Througout the company’s 115 year history from 1890 through 2005, Unocal maintained it’s corporate offices and headquarters in California.

    Up until the time of the merger with Chevron in 2005, senior executive staff was housed in El Segundo, CA and corporate support staff was based in Brea, CA.

    Unocal did operate a large facility in the Houston suburb of Sugar Land, TX.

      1. Exploration and Production
        Exploration and Production staff were consolidated in the mid 1990’s to the Sugar Land, TX office. This is where you may remember, seen or have heard about the visits by the people from Afghanistan.

        After re-reading your article, you mention that the pipeline through Myanmar was completed in 2003. The pipeline for all practical matters was completed in late 1998. Have you contacted anyone at Chevron’s San Ramon office in Corporate Communications for specific completion dates of the pipeline? Much of this can be gleaned from Union Oil’s 10k and 10q reports.

        Also, the pipeline is still under ownership of Union Oil Company of California through its partnership with operator Total.

        Of course after the merger, Union Oil became a wholly-owned subsidiary of Chevron, while Unocal Corporation was merged out. Yes, at the end of the day it’s Chevron’s now.

        Not because of Unocal’s years of wrangling over the Myanmar project, Unocal was basically a holding company with very few assets in name. Virtually all operations were conducted by Union Oil Company of California which did business using the shortened name of Unocal. All contracts, agreements, employee payroll and benefits remained under Union Oil Company of California up until the time of the merger with Chevron. This was in place going back to when the Unocal holding company was created in 1983.

        Just a couple of additional pieces of information you may find of interest.