BANGKOK/SEOUL -- Asian energy companies' continued presence in Myanmar is raising concerns that they could blunt the impact of new European Union sanctions on the country's state oil and gas company.

As the international community seeks to pressure Myanmar's military government, the EU announced late last month that it would ban its companies and individuals from providing funds to Myanma Oil and Gas Enterprise, or MOGE, and freeze its assets within the bloc. The company both invests in resource development projects and collects government royalties for gas projects in Myanmar.

The Myanmar government expects to earn $1.5 billion from oil and gas in fiscal 2022, equivalent to nearly 10% of its overall budget. Pro-democracy forces have urged foreign companies to halt payments to MOGE, which they say helps fund military rule in the country.

TotalEnergies, a French multinational that has a stake in Myanmar's largest gas field at Yadana in the Andaman Sea, said in January it would exit the country within six months. American oil major Chevron is also considering pulling out.

Asian companies, in contrast, have been more reluctant to abandon their interests in Myanmar.

Posco International, the trading arm for South Korean steelmaker Posco, holds a 51% stake in the Shwe gas field off the western coast of Myanmar. Though much of the project's output is exported to China, some is used at power plants within Myanmar. Halting the gas field would disrupt the fuel supply for power plants in Myanmar, hurting civilians, Posco International has said.

The Shwe gas field is the only resource development project in which Posco International has a stake, and was responsible for over 30% of the company's 585.4 billion won ($472 million) operating profit in 2021. It has a contract to supply gas to China National Petroleum Corp. until 2043.

Posco International is also proceeding with a $470 million Phase 2 investment, which is slated to start production by the end of the year. The trading company is set to pour another $315 million into Phase 3. Withdrawing now would be a major setback.

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Meanwhile, Thailand's PTT Exploration and Production on Monday announced it would take over operations at the Yadana gas field from Total. The "Yadana project is a pivotal source of natural gas supply to the livelihood of the people in both Myanmar and Thailand," it said.

Ironically, Total's exit from Yadana and redistribution of the French company's stakes among the existing shareholders will increase MOGE's interest in the project to over 20%, from 15%.

Thailand relies on Myanmar for 15% of its natural gas, and its industrial sector could suffer if the supply stops. Myanmar can only export its natural gas through pipelines to Thailand and China, neither of which is considering major curbs on shipments. European sanctions will have a limited impact on funding for the Myanmar military as long as exports and royalty payments to MOGE carry on.

U.S.-based nonprofit Earthrights International warns that the introduction of new stakeholders would only end up helping the Myanmar military. "TotalEnergies must immediately order gas revenue payments to be made into protected accounts outside the reach of the junta," it has said.

To date, the U.S. has not yet imposed penalties aimed at MOGE. If Washington were to join the sanctions, it would squeeze dollar-based payments to and from the company that now usually pass through American banks. Combined with the EU sanctions, this could prevent MOGE from procuring materials that are necessary to maintain gas fields in the country.

Still, Myanmar's previous military government kept producing gas as the U.S. and others applied sanctions that stayed in place until 2011.

While costs might increase, operations in the gas fields could proceed unimpeded by conducting transactions in currencies other than dollars, an industry insider said.