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Chevron will need to evaluate how feasible an exit from Myanmar would be, after an activist shareholder filed a resolution requiring the company to do that. Azzad Asset Management said Chevron would need to consider the risks of doing business in a country whose government is, according to the firm, “complicit in genocide or crimes against humanity.”
This is not the first time the activist investor has tried to push Chevron into reviewing its Myanmar operations. At the last annual shareholders meeting, Azzad filed its first resolution on the matter, but it only drew support from 6 percent of Chevron shareholders.
Chevron has two options now, to begin the review process or ask the SEC to allow it to block the resolution. If the company opts for the latter, Azzad could appeal to the regulator.
Myanmar has been making headlines in recent months with a crackdown on Islamist violence in the state of Rakhine, which has turned into what Azzad termed “ethnic cleansing” against a Muslim minority, the Rohingya. Since August, when the Myanmar security forces began the crackdown, more than 600,000 Rohingya have fled to neighboring Bangladesh.
Officials from the United Nations and U.S. Secretary of State have called what is happening in Myanmar genocide, but the Myanmar government denies any wrongdoing.
Chevron has been present in the Southeast Asian country for 20 years, with a 28.3-percent interest in a major gas project including the Yadana offshore field, which produced some 128 million cu ft of gas in 2016.
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In addition to the gas project, Chevron also has a 28.3-percent stake in the pipeline that transports the gas produced at the Yadana field to the coast and then into Thailand.
Following the resolution announcement, a Chevron spokeswoman told Reuters that the company valued the ongoing dialogue among shareholders on the issue, adding that “We will continue to work with other U.S. companies and the government to promote the value of U.S. investment in Myanmar and the need to foster a business environment that respects human rights.”
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.