Case Analysis: Unocal in Burma

Case Analysis: Unocal in Burma

Union Oil Company of California, Unocal, progressed into a full-service oil business after being founded more than 100 years ago to develop oil fields in California. Its services included extraction, refining, distribution, marketing and retail. Because of the depletion of oil fields in the United States, Unocal turned to foreign investments with a strategy to market its one-stop shopping business to governments.

A major international project of interest was the пїЅYadana FieldпїЅ off the shore of Burma, which contained approximately 5 trillion cubic feet of natural gasпїЅenough to produce gas continuously for about 30 years. BurmaпїЅs government created the company Mynamar Oil and Gas Enterprise (MOGE) to find private companies to help develop their oil. In 1992, MOGE signed a contract with Total S.A which gave Total the right to develop the field and build a pipeline to transport the gas from Yadana to Thailand. In the contract, MOGE agreed to provide Burmese government security through its army and ensure that land was cleared and that the right of way was secured in the passage for the pipeline through Burma. ThailandпїЅs government would purchase