POSCO International’s overseas gas exploration project has received a warning. The U.S. government has announced sanctions against the Myanma Oil and Gas Enterprise (MOGE), which holds a stake in the gas project operated by POSCO International, citing civilian oppression by the Myanmar military regime as the reason.
On Nov. 1, POSCO International stated that the U.S. sanctions against the MOGE would not affect its gas exploration project in Myanmar. On Oct. 31 (local time), the U.S. government imposed measures to prohibit direct and indirect financial services to MOGE. As a state-owned oil and gas company in Myanmar, MOGE is known to provide the Myanmar military regime with hundreds of millions of dollars in funding annually.
In the Myanmar Shwe Gas Project, MOGE maintains a 15 percent ownership stake, while POSCO International holds operating rights and the majority share of 51 percent. Other contributors to the project comprise the Indian state-owned oil company ONCG at 17 percent, the Indian state-run gas company GAIL at 8.5 percent, and the Korea Gas Corporation at 8.5 percent.
The Myanmar Shwe Gas Project accounts for 36 percent of POSCO International’s operating profit. In the third quarter, the company reported a total operating profit of 311.7 billion won (US$229.61 million), with 112.5 billion won (US$82.87 million) coming from the Myanmar Shwe Gas Project. The potential disruption in the Project’s operations is a significant concern as it could have a substantial impact on POSCO International.
However, POSCO International remains confident and unconcerned. A spokesperson for POSCO International stated, “Since the coup in Myanmar in 2021, international pressure on the Myanmar military regime has been frequent,” and added, “However, the Myanmar Shwe Gas Project is an operation where POSCO International holds the operating rights, and the MOGE is merely a shareholder, making it unrelated to international sanctions.”