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There were no potential buyers among neighboring countries.

 

Slave labor was used to clear land for this pipeline ...

  

In 1992 Total and Unocal put in competing bids for the licenses to blocks M-5 and M-6 which contained the two fields. The French oil company Total SA (now TotalFinaElf) outbid California-based Unocal and signed a production sharing contract, or PSC, with Myanmar Oil and Gas Enterprise, or MOGE. The agreement gave MOGE an option to take a 15 percent stake in the project. In December 1992 Total accepted a Unocal offer to buy in for US $8.6m.

 

Both firms had gas interests in Thailand and good relationships with the state-owned Petroleum Authority of Thailand, or PTT (a romanization of its Thai acronym Por Tor Tor). On September 9, 1994 the total and Unocal signed a memorandum of understanding with PTT. The deal gave the firm’s subsidiary PTT Exploration and Production, or PTTEP an option to buy a stake in the Yadana consortium—fairly standard for a cross-border gas deal.

 

On January 29, 1995 PTTEP exercised its option for a 30 percent stake. On February 2 its parent PTT signed a gas sales agreement, or GSA, with the Yadana consortium under which the Thai state gas company would be supplied with a daily contracted gas quantity of 525MMcf/d (million cubic feet of gas a day) under a take-or-pay regime—that is, that PTT had to pay for the gas whether it used it or not. MOGE exercised its option for a 15 percent stake in the project on April 3, 1995.

 

“This type of cross-border energy development is vital to the region’s growth,” said John Imle Jr, president of Unocal at the time. The evidence, however, suggests otherwise.

 

There are major gas reserves in the Gulf of Thailand. When the GSA with the Yadana consortium was signed there had not been any exploration in the Joint Development Area that Thailand shares with Malaysia. Regardless, PTT agreed to pay significantly more for the gas from Burma than it was paying for gas produced in Thailand (Burmese gas currently costs PTT about 18 percent more than Thai gas). There does not appear to be any rational explanation for Thailand’s signing off on such an expensive deal, either in business or energy security terms.