September 16, 2002

The Burma Campaign UK (BCUK) are celebrating the end of a decade long campaign to force Premier Oil UK out of Burma. Premier’s two largest shareholders, Petronas and Amerada Hess, will strip the company of its Burmese and Indonesian assets respectively.

Premier’s name has become synonymous with corporate irresponsibility. In the 1990s the company went into partnership with Burma’s military dictatorship to build a gas pipeline across Burmese territory for the sale of gas to Thailand. BCUK’s campaign highlighted the financial lifeline the project provided to the junta, the human rights abuses committed by pipeline security forces, and calls by Burma’s pro-democracy leader Aung San Suu Kyi that the company should pull out. As the campaign gained momentum the UK government took the unprecedented action of calling directly for Premier to withdraw from Burma.

It seems however that the major blow was dealt when the Burma Campaign UK provided US investment funds with information that Amerada Hess had possibly contravened US sanctions and UK company law through its investment in Premier. With investors concerned that Amerada had broken the law, as well as mounting pressure from US Burma activists against Amerada, the company was left no option but to withdraw from Premier. The company’s withdrawal was a catalyst for Petronas to similarly leave Premier. Both companies combined had a 50% holding in Premier.

John Jackson, Director of BCUK says: “The demise and fall of Premier is a warning to any company thinking about investing in Burma – it’s more trouble than it’s worth. And if you won’t listen to us, then give the Directors of Amerada Hess or Premier Oil a call.” He added: “We won’t stop here, we’ve won a battle but not the war. The pressure needs to be turned up on TotalFinaElf and Unocal, who are as guilty as Premier of propping up one of the most brutal regimes in the world.”

Notes to Editors:

1. Premier became the first oil company to sign an exploration deal with Burma’s military for the exploration of the Yetagun offshore gas field in May 1990. Its partners were Petronas of Malaysia, Nippon of Japan, the Petroleum Authority of Thailand (PTT) and the regime’s Myanmar Oil and Gas Enterprise (MOGE). A $650 million capital investment was required to finance the project and the gas started flowing in May 2000. It is estimated the field will continue to produce gas for at least 20 years. UK energy consultants, Wood Mackenzie, have estimated that Burma’s earnings from Premier’s Yetagun field will be around $823 million through to 2025.

2. Yetagun is the second gas field to start extracting gas in Burma – the Unocal/TotalFinaElf consortium’s Yadana field being the first.

3. Aung San Suu Kyi, Burma’s pro-democracy leader and Nobel laureate has said, “Premier Oil is not only supporting this military government financially, it is also giving it moral support, and it is doing a great disservice to the cause of democracy. It should be ashamed of itself”.

4. Robin Cook, when Foreign Secretary, said, “I’m going to make it quite clear, we do not approve of what Premier are doing, they know that perfectly well, we would much rather they stopped and they know that perfectly well”. Former Foreign Minister, John Battle, also urged Premier to pull out of Burma saying: “I really expect Premier to do the decent thing without having to resort to legal pressure”.

5. Amerada Hess attempted to invest in Premier despite the 1997 US Government ban on all new investment in Burma. To do this Amerada told shareholders:

A. That the capital used to purchase shares in Premier Oil in 1999, was provided on condition that it would not be invested in Burma.

B. That the two Directors appointed by Amerada to Premier’s board were under strict instructions from Amerada not to participate in any discussions relating to Premier’s Burma interest.

The Burma Campaign UK sought legal advice on the issue and discovered that there had been no stipulation that Amerada’s capital could not be used in Burma. BCUK also discovered that the Amerada directors on Premier’s Board would not be fulfilling their fiduciary responsibilities under UK company law, if they did not discuss Premier’s largest project – the Yetagun field in Burma – at board meetings.

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