Premier Oil set to quit Myanmar

INDEPENDENT oil group Premier Oil is poised to relinquish its stake in its controversial oil project in Myanmar as part of a £400m deal to buy out its two major backers.

Amerada Hess of the US and Petronas of Malaysia will give up their combined 50% stake in Premier in exchange for a number of assets.

Apart from the gas field and pipeline in Myanmar (formerly known as Burma), it will also give up a part of its stake in the West Natuna field off the coast of Indonesia. Human rights groups and shareholders have attacked Premier for the Myanmar project, claiming it used slave labour.

The deal - which may be unveiled with Premier's half-year update today - will see the group's output reduced from 50,000 barrels per day to 35,000bpd. It is now expected to focus on exploration and the early development of new finds.

Petronas and Amerada baled out Premier during the Nineties when it ran up massive debts in an expansion drive. But their influence has been criticised by shareholders and weighed on Premier's shares, now trading at around 24 1/4p.