Premier Oil has been embarrassed again by the Burmese military, which has delayed the handover of the company's local assets to its partners by withholding written permission to do so.
Without such permission, the British oil exploration and production specialist cannot withdraw, as planned, from the country. The six-month delay also stalls a huge restructuring of its shareholding which could transform its stock price.
Premier, which was criticised by human rights activists over its operations in Burma, insisted yesterday the deal was not in danger of collapse.
"We are not signalling concern about the sale. It will go through. We already have verbal approval from Myanmar [Burma] and we already said the timetable was in the hands of the regulatory authorities," said the finance director, John van der Welle.
Premier said it expected the switch of its 26.67 per cent holding in the Yetagun gas project to take place "some time in the second quarter". But this is the third deadline given by Premier, which originally talked of the "end of December" and then in January claimed permission would come"some time in the first quarter".
The Burma assets, plus certain stakes in the Natuna field in Indonesia, are being switched as part of a $670m (£427m) deal whereby Amerada Hess of the US and Petronas of Malaysia will both sell their 25 per cent stakes in Premier.
That block of shares was a major drag on the Premier share price because it left the British firm protected, in effect, from any takeover bid.
The Indonesian authorities have already given their written permission for the Natuna field changes. The delays were attributed by Premier to the Burmese government and to the fact that PTT of Thailand, Nippon Oil of Japan and MOGE of Burma have been keen to take a slice of Premier's share under pre-emption rights. Originally it was expected that the entire Yetagun stake sold by Premier would go to Petronas, which would have been less complicated.
The latest delay in Burma was announced by Premier as it announced an increase from £20.3m-£25m in net annual profits - despite a £13.1m exceptional charge against its British assets. The profit figure was lower than the £26m to £35m expected by analysts.
Turnover rose 23 per cent to £263.1m, reflecting higher production levels and a global crude price that increased over the 12 months from $19.30 per barrel to $28.70.
Net debt at Premier will have been brought down from £500m at its peak in 2001 to around £50m, once the restructuring is complete.
· Campaigners yesterday called for a moratorium on a BP-led pipeline consortium from the Caspian to Turkey, claiming human rights abuses were being perpetuated in the area. BP said that work would begin on schedule next month, arguing that the Baku-Tbilisi-Cyehan link would bring many benefits to the region.
