Arakan Library - Ramree Island

Arakan: - One Who Preserves and Takes Care of Their Own Nationality.

Publication by Arakan Action Association (AAA.)

Arakan Library was founded by a group of Arakan Action Association (AAA) in exile in Thailand from Burma in 2007 doing to voice for the knowledge, the people democratic and human rights.

Arakan Action Association (AAA)

Chotana Road , Chaing Mai ( 50301 ), Thailand.

Email : arakanactionassociation@walla.com , +66—089-637-4383, +66—053-409-577

Oil in Burma

by <Marilyn v. Longuir>

Ramree Island

The most productive field on Ramree island was situated in hilly country near the western coast and close to Minbyin. It was not possible to reach the oil field by road, so the oil was removed by sea via a newly constructed road to a small inlet and then to nearby Kyaukpyu, the island's administrative centre and port. The oil tract near Minbyin, sometimes referred to as Yenandaung, covered an area of 518 to 777 hectares. In one section of the field, 32-36 hectares were worked by four or five local Arakanese merchants who lived in the area (Report, H.Bukle). Up to 1850, an annual fee applied, ranging from Rs 4-50 per well, depending on productivity. After 1850 the annual fee was reduced to Rs 2 per well, an amount paid by British and Arakanese miners alike (Letter No.16, Govt. of India, 27 May 1890). Nevertheless, there were problems associated with this field for it was reported: "In the earlier stages of the industry …. No restrictions seem to have been imposed by the Government, and as a consequence of this when first attention was drawn to the resources of this neighborhood it was found that many Arakanese and others had dug shallow wells and had thereby acquired claims which could not with justice be overlooked." As a result, it was necessary to arrange for the site of these wells to be demarcated. Eventually 175 wells were demarcated on this field, some only a metre or so apart. A decision was made that "accorded the privilege of objecting to the sinking of any new well within a radius of 300 feet from any of the per-existing wells." This restriction was to protect the oil reserves of the original wells, but the decision hindered rather than helped the development of the field by the new commercial interests. The distance of 300 feet (91 m) was too great and caused problems when old wells were abandoned, for no one was permitted to sink a new well within the specified perimeter (Report, H. Buckle).

On the Twinza Reserves of Yenangyaung, well sites were much closer than 91 metres and remained so until 1908. Embodied in the Executive Instructions of 1893 was a charter covering the rights of the twinzayo, in which it was stated that "the maximum area of the site was to be two square chains, or one-fifth of an acre," No minimum area was stated and the twinzayo and twinza clung to the customary diameter before 1893 of 60 feet, the equivalent of 18 metres (Report – Twinza Reserves, 60-61, IOR L/E/7/608). At Yenangyaung as in Arakan, the British protected the rights and sites of indigenous well owners.

As early as 1877, savage had been prospecting on Ramree and had forwarded short memorandum on coal deposits to the then Chief Commissioner, Colonel Sladen (Mallet 1878a, 207). For his oil venture, Savage purchased 75 of the group of 175 existing wells (Letter No.16, Govt. of India, 27 May 1890), but in 1883 sold them to the newly formed Arakan Petroleum Company. Five years later, this company, which employed Canadian supervisors, had twenty wells in commercial operation, worked by steam power (Report, H.Buckle).

The first prospecting license in the area had been granted to the Boronga Oil Company in 1881 (Report, H. Buckle). This concession gave Boronga Oil the right to prospect over 4 square miles [1,037 ha], although within this area, "rights of existing well-owner" were to be respected. The prospecting rights were for one year, after which the company could select not "less than one square mile." The most interesting feature was the granting of an exemption from royalty payments for thirty years. This was qualified by the statement that "these favourable terms were allowed in consideration of the large sacrifices which had been made by this Company in the exploration of the oil-fields in the Eastern Boronga island" (Letter No. 16, Govt. of India, 27 May 1890). No such concessions were ever made in Upper Burma.

Like the Arakan Petroleum Company and another company, the Autralian Oil Company, which appeared for a time on the field, the Boronga Oil Company employed Canadian drillers (Brown and Dey, 370). Boronga Oil spent over Rs 300,000 at Kyaukpyu and at Akyab (Maung Shein, 166), including construction of a "capacious" refinery near Kyaukpyu. The demand for refined oil by Europeans in the region was small, while the Arakanese still preferred crude to refined oil (Report, H.Buckle). Not many Arakanese homes would had new fashioned kerosene lamps with modern wicks designed to burn the refined oil, and crude oil was more suitable for painting and caulking.

The operators of these early companies had been very optimistic and forecasts even suggested that production in Arakan would double that of Yenangyaung (Corley 1983, 1:24). One company engaged in drilling for oil at Minbyin confidently forecast in its prospectus the production of 200 barrels (8,000 gallons) per day (Ball, 146). Yet the Boronga Oil Company failed financially in 1885 (Maung Shein, 166). Its rights were put up for by 1888, Senior's eighteen wells were producing 36,648gallons (166,602 L) annually, though further prospecting on a limited scale had proved unsuccessful. A lease had been granted over the area for thirty years, and a once-only fee of Rs 250 paid. From 1 April 1892, a 5% royalty became payable on gross production.

Wells were sunk at three other sites on Ramree. At Ledaung, situated in the southwest corner of the island, Arakanese speculators had dug twenty two shallow wells. The Ledaung oil was considered to be of remarkably good quality, but the wealth of the field could not be determined by these shallow borings. Another site was at Leikmaw on the western coast, where in 1884, a new company, the Ramri Oil Prospecting Company, obtained a prospecting lease over one square mile (259 ha). Over the years, traces of oil had been discovered in this area, but the mining results were disappointing and the company failed. Fifteen wells were still owned by Arakanese but were not very productive. The third site was west of the cantonment at kyaukpyu. Over a period of three or four years, two brothers, William and David Bell, drilled there for oil. Their eighteen wells were subsequently abandoned after production proved inadequate (Report, H. Buckle).

Even large trading companies like the Bombay Burmah Trading Corporation Limited took an interest in the industry. A single sentence in that company's history attests to their attempt to find oil in Arakan: "In 1879 there was an abortive experiment in exploring for oil on Ramree Island off the Arakan Coast"(Pointon,14).