Important Total, Premier Report

[dohrs@xxxxxxxxxxxxxxxx]

This carefully researched material clarifies some of the allegations of
direct financial support for the Burmese junta by oil companies, and also
illustrates the fuzzy accounting methods that have obscured the facts.  It
should be read in connection with the reports of direct payments to
military overseers of forced labor, that were detailed in the US Dept. of
Labor report on labor practices in Burma, which can be found at:
http://www.dol.gov/dol/ilab/public/media/reports/ofr/burma/main.htm



********************************************************************

GAS MONEY

The Belgian web site supporting Burmese democrats is presently publishing 
the accounts of the sub-companies of TOTALFINA in Burma. The source is a 
French legal paper, "Les Petites Affiches", as these sub-companies 
are registered in France and consequently are obliged to publish their 
accountings. A couple of scoops are included in these publications.

Here is the translation of part of the analysis of the accounts.


**********************************************************************
http://users.skynet.be/vero.michel/birma.html

Notes on the accounts of TOTAL in Burma

Source: "Les Petites affiches", dated 30/06/1993, 29/06/1994, 12/07/1995, 
08/07/1996, 09/07/1997, 20/07/98  and 09/08/1999.

A French legal paper, "Les Petites Affiches", has just published 
on August 9 , the accounts of three sub-companies of TOTALFINA in Burma : 
Total Myanmar Exploration and Production (TMEP), Total Profils Petroliers 
(TPP) and Total Myanmar Power and Fertilizers (TMPF) . The object of TMEP is 
the exploration and production of the Yadana gas, and the construction of 
the pipeline to Thailand. TPP is managing the pipeline built by TMEP ; for 
example, this sub-company has paid the assurance premiums (FFr10m, $US1.7m, 
in 98). TMPF shares the responsibility of another officially stopped 
project,, the "3 in 1 Project",  whose planned object is the construction 
(and may be the management),of another pipeline to Rangoon, of a fertilizer 
plant and a power plant for the fertilizer production unit.

TOTAL MONEY

The most interesting point is that the accounting of TMEP is including an 
account whose title is "Advances to MOGE " (in French, "Avances a MOGE "). 
In 1992, 1993 and 1994, "Avances to MOGE"  was another denomination of the 
"Works paid for other partners" account ("Travaux financés pour le compte de 
tiers" in French), TOTAL may usually advance money to its partners but, in 
the Yadana project, the problem is that TOTAL has advanced money to partners 
guilty of forced labor, drug production and traffic.
-----------------------------------------------------------------
"Avances to MOGE" (in French Francs, 6 FFr = 1US$) : Year 1992 : 34 696 
693,44 // Year 1993 : 112 287 943,14 // Year 1994 : 143 480979,12
-----------------------------------------------------------------
The words "Advances to MOGE" disappeared still 1995, but the account "Works 
paid for other partners" was still mentioned.

-----------------------------------------------------------------
"Works paid for other partners" (in French Francs) : Year 1992 : 34 696 
693,44 // Year 1993 : 112 287 943,14 // Year 1994 : 143 480979,12 // Year 
1995 : 199 308 293 // Year 1996 : 365 512 648 Year 1996 :  365 512 648  // 
Year 1997 : 744 992 362 // Year 1998 : 916 375 948
-----------------------------------------------------------------

A BIG DEBT

Today, the Yadana project is accounted as a debt which will be paid by the 
sale of gas : FFr1 067 million comparing to FFr 114 m of global assets. 
According to the annex of the accounts, the financing of this debt has been 
realized by the parent company, TOTAL S.A. and by another sub-company, TOTAL 
FINANCE.

The three sub-companies are indebted, including TOTAL MYANMAR POWER & 
FERTILERS, though the "3 in 1" project has been officially stopped for a 
couple of years. The present debt of the "3 in 1" project could amount FFr 
75m ($US15m) mainly because of the payment of participation titles whose 
destination is not mentioned.

Concerning Premier Oil and the Yetagun gas project, we know that this 
British company has advanced money to the MOGE but the publication of 1998 
accounting has just revealed that the MOGE paid back part of its debt before 
the beginning of the gas sale to Thailand.

Source : "Premier Oil report & accountings 1998 "
"Notes to the accounts for the year to 31 December 1998, p. 54

"25 Post balance sheet events

a) Arrangements for the funding of the Company's development commitments
in 
Myanmar were concluded in March 1999. This financing will provide all of 
Premier's share of the estimated costs of the development which is
expected 
to be finished in early 2000. Completion results in Premier receiving £77 
million, of which £56 million relates to expenditure incurred prior to 31 
December 1998. This expenditure was classified as fixed assets at 31 
December 1998. The remaining estimated development expenditure will be 
financed by additional drawings under the facility. The financing is secured 
on the assets of Premier Petroleum Myanmar Limited (PPML) the Company's 
subsidiary in Myanmar, and on a parent company guarantee of $10 million 
covering cost overruns prior to the completion of the development stage. The 
funding is by way of discounted zero coupon bonds with an interest accrual 
rate equivalent to LIBOR plus 550 basis points and has been raised by a 
joint venture company. In addition, the Company has agreed changes to the 
convenants and to the terms of the Senior Notes and the Corporate Credit  
Facility which are likely to increase net interest cost by around £1.2 
million in a full year.

b) On 31 January 1999 the Myanmar Oil and Gas Enterprise exercised its right 
to acquire a 15 % share to the Yetagun development. This resulted in a cash 
receipt by Premier of £17.3 million, being a reimbursement of costs already 
incurred since the beginning of the development phase. "

Premier Oil is presently financing its debts by selling part of its shares 
to other oil corps : PETRONAS of Malaysia and  AMERADA HESS of US ; these 
two corps will invest money in the Asian projects of PREMIER OIL.

NO RESERVE FOR RISKS

Shortly speaking, another "surprise"  included in the accounts of TOTAL 
sub-companies is that these three firms did not retain reserve for risks. In 
fact reserves for risks would have increased the debts of the 3 
sub-companies, and would have decreased the global result of TOTAL S.A. 
During the very last take over of TOTALFINA targeting ELF AQUITAINE, the 
chairman of ELF told in the press that the accountings of TOTAL was not 
rendering a rigorous analysis of the real situation of TOTAL.
*****************************