Transocean, the Swiss-American drilling firm being sued by the United States for its role in the recent BP oil spill in the Gulf of Mexico, has received a second subpoena over its activities in Burma, a recent regulatory filing with the US Securities and Exchange Commission ...
Chiang Mai (Mizzima) – Transocean, the Swiss-American drilling firm being sued by the United States for its role in the recent BP oil spill in the Gulf of Mexico, has received a second subpoena over its activities in Burma, a recent regulatory filing with the US Securities and Exchange Commission (SEC) shows.
The administrative subpoena came from the US Office of Foreign Assets Control (OFAC), the branch of the Treasury Department that oversees American trade and financial sanctions.
According to the filing submitted in September but made public last month, Transocean informed its shareholders: “We have received and responded to an administrative subpoena from the OFAC concerning our operations in Myanmar [Burma] and a follow-up administrative subpoena from OFAC with questions relating to the previous Myanmar operations subpoena response.”
“OFAC’s administrative subpoena authority,” according to the Treasury’s website, “generally provides the basis for OFAC to require the production of whatever additional information it may require to assess its enforcement response to the apparent violation.”
Transocean received first Burma subpoena after Mizzima exposé
The first administrative subpoena Transocean received about its activities in Burma came several weeks after Mizzima first reported in May that Transocean’s SEC filings showed the firm was hired late last year to do drilling work in Burmese waters co-owned by a company controlled by Stephen Law, a junta crony businessman alleged by the US government and analysts to be a major drug-money launderer.
Stephen Law, aka Tun Myint Naing, his Singaporean wife, and his “narco warlord” father are all on OFAC blacklists, officially called the Specially Designated Nationals (SDN) list. All three are also listed in similar European Union travel bans and sanctions lists.
Transocean’s 8-K filing with the SEC on November 2 last year showed that Chinese state-run energy company CNOOC hired Transocean’s semi-submersible Actinia, a Panamanian-registered drilling rig, to operate in Burma from October to December.
According to the CNOOC website, all of the firm’s stakes in Burma’s gas industry are held in partnership with China Focus Development (formerly known as Golden Aaron) and China Global Construction, with CNOOC as the operator. China Focus Development is a privately owned Singapore-registered firm whose sole shareholders are Stephen Law and his wife, Ng Sor Hong, aka Cynthia Ng. The US and EU sanctions lists show Ng Sor Hong to be the chief executive of the firm, which is also among more than a dozen companies controlled by Law on the OFAC blacklist of banned Burma-related entities.
Law’s Sino-Burmese father, Lao Sit Han, aka Lo Hsing Han, is believed by US drug-trafficking analysts to have controlled one of Southeast Asia’s best-armed narcotics militias during the 1970’s. In a deal with the Burmese regime, Lao Sit Han moved to Rangoon where he reportedly used the profits from his drug empire to expand into other areas including operating ports through the family controlled Asia World Group, also a US-blacklisted firm over which Lao Sit Han is chairman.
Stephen Law is the managing director of Asia World and is believed to be the driving force behind what has become one of Burma’s largest conglomerates. As well as running Burma’s largest deepwater port, the group owns lucrative toll highways, hotels and is also involved in many construction projects, including building Rangoon’s Traders Hotel and refurbishing the Rangoon airport.
A February 2008 statement by the US Treasury said: “In addition to their support for the Burmese regime, Steven Law and Lo Hsing Han have a history of involvement in illicit activities.”
Mizzima’s report of Transocean’s ties with a blacklisted Burmese narcotics-trafficking clan was picked up in a front-page story in The New York Times, which also detailed the firm’s questionable practices in Iran, Norway and Syria.
Activists call for Transocean to be punished for any violations of US sanctions
Wong Aung from the Shwe Gas Campaign, an advocacy group strongly opposed to the Shwe oil and gas pipeline project between western Burma and China told Mizzima that US authorities must take a strong stand against firms that wilfully violate US sanctions. He said: “The US must send a clear message that it won’t tolerate firms like Transocean violating US sanctions. There has to be full investigation of Transocean’s activities in Burma. There needs to be full disclosure of what happened and what Transocean is presently doing in Burma.”
Transocean resisted subpoenas in Gulf of Mexico spill case
Transocean, whose Deepwater Horizon rig exploded in April in the Gulf of Mexico, resisted responding to three successive subpoenas issued by US authorities investigating the accident that killed 11 and caused an environmental catastrophe after the explosion and subsequent fire.
Last Friday, US District Judge Carl Barbier in New Orleans ruled that Transocean must abide by the subpoenas that sought safety inspection information for all of Transocean’s rigs based in the gulf at the time of the accident.
The judge reasoned that the requests were for a “proper statutory purpose, seeking documents that are relevant, and that are in no way unduly burdensome”. Transocean had argued that US authorities were asking for too many documents and requesting files not directly related directly to the accident. Barbier gave Transocean 15 days to deliver the documents. It was unclear if the firm would appeal.
Company’s rig caused tense naval stand-off between Burma and Bangladesh
The Bangladeshi government on November 2, 2008 revealed that the previous day its naval vessel the BNS Nirvoy detected the Burmese navy escorting four drilling ships, and a tug pulling the 100-metre-long drill rig Transocean Legend in waters claimed by Dhaka. The announcement was the first sign of a serious diplomatic spat that followed with a costly and heated naval stand-off between two of the world’s poorest nations.
On November 3, Bangladeshi authorities in Dhaka summoned the Burmese ambassador to issue a strong protest and Bangladeshi’s military-backed interim government, furious at the Burmese regime’s actions, responded by sending four of its own naval ships to the disputed area.
The Bangladesh Navy had caught Transocean’s Bahamian-registered rig and its Burmese naval escorts in an area the Burmese regime had designated as the AD-7 offshore gas block. Transocean’s SEC filing revealed that Daewoo had hired the rig to conduct drilling exploration at a cost of US$424,000 a day. Daewoo and its partner firms Kogas, had bought rights to drill in AD-7 despite the fact that Bangladesh claimed it was their territory.
The joint State Peace and Development Council (SPDC)/Transocean incursion into the disputed waters came three weeks after Burmese Energy Minister Brigadier General Lun Thi had assured his Bangladeshi counterpart that Burma, the Bangladeshi daily newspaper New Age quoted him as saying, “would not conduct gas exploratory work in the disputed maritime boundary area until the issue was settled” between the two nations.
Lun Thi made this apparently hollow promise during an October 8, 2008 Dhaka meeting with Dr. M. Tamim, then serving as special assistant to the chief adviser for Bangladesh’s Ministry of Power, Energy and Mineral Resources.
Immediately after the Bangladeshi government went public with their complaints, forces from both sides mobilised along their shared land border. The heightened tensions would prove deadly when on November 3, the mutilated bodies of four Bangladeshi woodcutters were discovered by relatives two kilometres inside Burmese territory. Bangladeshi military authorities said the Burmese military had shot and killed the four men for trespassing into Burmese territory.
Two days after the killings, an unidentified Burmese naval official told Agence France-Presse on November 5: “We will try to solve this peacefully, but we are also ready to protect our country if needed … we will not tolerate being insulted, although we do want goodwill. We will continue with exploration.”
Burma’s regime officially responded to the Bangladeshi complaints in a belligerent tone through its mouthpiece, the New Light of Myanmar, declaring it would continue to operate in the disputed territory because Bangladeshi concerns were “mistaken and unlawful”. In an article published November 7, 2008, the newspaper declared that “Myanmar [Burma] rejected the mistakenly-made demand of Bangladesh” and therefore “in order to protect the interests of the country in line with international laws, Myanmar [Burma] will continue to do the work in Block No. AD-7 till its completion”. In fact, international law dictates that territorial disputes should be resolved first through peaceful means before drilling takes place.
Two days later, Daewoo, Transocean and the Burmese regime withdrew their vessels. It was reported that the Korean and Chinese governments had intervened to de-escalate the situation. China is set to be the destination of most of the gas Daewoo and its partners extract from off Burma’s Arakan coast.
Fortunately for Transocean, its equipment sustained no damage during the stand-off. Had a naval clash ensued, the exchange of fire could have easily caused Transocean’s multimillion-dollar rig to sink.
On December 15, about a month after the stand-off, Reuters reported that a senior Burmese energy ministry official had revealed that test results from the disputed AD-7 block “not very encouraging”. The anonymous official added that “we still need to dig four or five more test wells before we confirm the deposit is not commercially viable”. A Daewoo International report issued in March this year reveals however that the firm increased its stake in the contested block after its three partners pulled out. The report failed to show any exploration activity taking place in the disputed block since the standoff in November 2008.