Malaysia's Petronas may buy Texaco'

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Subject: Malaysia's Petronas may buy Texaco's Burma stake

Tuesday June 10 

Malaysia's Petronas may buy Texaco's Burma stake
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By Raj Rajendran 

KUALA LUMPUR, June 10 (Reuter) - Malaysian national oil firm Petronas is 
studying the purchase of Texaco Inc's 42.9 percent stake in Burma's Yetagun 
gas field, president and chief executive Hassan Marican said on Tuesday. 

Texaco (TX) is the largest shareholder and operator of the field, which has 
estimated gas reserves of one trillion cubic feet and lies 125 miles off 
Burma's western coast in the Indian Ocean. It is being commercially evaluated. 


Marican said Texaco had appointed an investment banker to look for buyers of 
the U.S. oil giant's stake. 

``We have been approached by the investment banker. Yes, we are looking and 
studying the opportunity,'' he told reporters on the sidelines of an industry 
conference in Kuala Lumpur. 

Texaco has said it might sell the stake. 

Earlier this year, the United States imposed sanctions to protest what it 
called political repression by the ruling military junta, banning fresh 
investment in Burma by U.S. companies. 

U.S. firms have been under pressure to withdraw from Burma by human rights 
activists. High profile names which have pulled out of Burma include U.S. soft 
drinks giant PepsiCo Inc (PEP). 

But oil companies have also faced particular pressure because they tend to be 
the biggest investors in Burma. 

Unocal Corp (UCL) has a 47.5 percent stake in the US$1.2 billion Yadana field, 
which plans to pipe gas to Burma and Thailand. 

Texaco's Yetagun field is due to come on stream in 1999 and the consortium has 
already signed a 30-year deal to sell 200 million cubic feet per day of gas to 
Thailand. 

At Texaco's annual shareholder meeting in May, the company said it might sell 
the Yetagun stake, citing financial rather than human rights concerns. 

Later the same month, the U.S. Treasury's Office of Foreign Assets Control 
(OFAC) said existing contracts entered into by U.S. companies in Burma could 
proceed. 

There are around 20 U.S.-based companies with direct investment or employees 
in Burma. The largest are Unocal, Texaco and Atlantic Richfield Co (ARC), the 
Washington-based Investor Responsibility Research Centre said in May. 

Oil companies have generally argued that unilateral sanctions have not worked 
in the past and the best way to promote change is through investment. 

The U.S. efforts to raise human rights to the top of the Asian agenda received 
a severe blow earlier this month when the Association of South East Nations 
(ASEAN) decided to accept Burma, Cambodia and Laos as full members. 

They are scheduled to join Brunei, Indonesia, Malaysia, the Philippines, 
Singapore, Thailand and Vietnam as members of the grouping at a summit in 
Kuala Lumpur next month. 
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