Arakan Library - Decline

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>

Decline

The demise of the Arakan oil industry was predicted as early as 1886, when the Chief Commissioner reported to the Government of India; "Experience in the Arakan oil-field has shown that steam machinery, even steam-boring machinery, did not pay in a field where the supply of oil at any single hole is so scanty. In Kyaukpyu all the employers of steam machinery have either become bankrupt or have lost money; while the hand machinery, and cheap appliances used by the Natives, suffice them to raise regularly a moderate quantity of oil at rates which are remunerative to well – owners" (Memorandum on earth oil at Yenangyaung by Chief Commissioner, Burma, 1 July 1886, IOR P2664A).

Poor supply was there fore the major reason for the decline of the Arakan oil industry, but the industry faced other difficulties. Relationships on the fields were not smooth. Revenue records indicate friction between Senior and the Arakan Petroleum Company on Ramree (R&A[Minerals] Dept, Burma, September 1886, Index 7, IOR P 2663) and between Savage and Arakan Petroleum on Eastern Boronga Island (R&A Dept., Burma, Part 2 (B), Minerals, March 1888, Orders 13 & 16, IOR P 3122). These quarrels reflected the struggle of the industry to survice.

Imported American oil was certainly another major problem. In 1885, 3,453,213 gallons of foreign petroleum (presumably kerosene) were imported through the port of Rangoon, and the Chief Commissioner reported that it was "for sale in shops, or … [was] hawked about in every town and in most large villages of Upper and Lower Burma" (Memorandum on earth oil, Note to par.3). With import duty on kerosene abolished in 1878 (Maung Shein, 166), both American and Russian kerosene had cheap entry into the local markets. The price advantage that Arakan oil had held over imported oils was thus lost. In 1888 Arakan crude oil sold at prices ranging from Rs 3-8-0 to Rs 4-10-0 per eight Imperial gallons (Report, H. Buckle).

By mid – 1886 Burmah Oil was refining an inferior oil for local use, which sold at 3-4 annas per gallon (Rs 1-8-0 to Rs 2 per 8 gallons). This compared with American oil, which retailed at 8 annas per gallon (Memorandum on earth-oil, par.2) but was of better quality. From these prices, it can be readily seen that Arakan oil was no longer competitive and had priced itself not only out of the local market but also out of markets further afield in Calcutta, Chittagong, Rangoon, and Bassein (Report, H. Buckle). As Yenangyaung, crude could also be bought in arakan and Chittagong (Memorandum on earth-oil, par.2), it is very likely Burmah Oil or possibly Moolla Ismail was supplying to these markets. For some years after annexation, Moolla Ismail continued to hold "the [crude oil] monopoly for the whole of India, except Madras and Ceylon," as well as the monopoly for the whole of India, except Madras and Ceylon," as well as the monopoly for domestic crude oil sales (Note, F.W.R. Fryer, 13 December 1890, IOR P3814).

By 1894 R.D. Oldham (153) Superintendent of the Geological Survey of India, presented a paper to the Arts Society in London in which he informed the members that "the produce [of Arakan] was too small to justify the continuance of operations on a larges scale." Although Oldham had not been able to obtain production statistics, he noted that "moderates amounts of oil are still obtained annually from open wells."

What else contributed to the failure of Arakan's commercial oil industry? In the beginning, hopes for large-scale production were fuelled by official reports. Thus H.B. Medlicott wrote as late as 1886, "There are no doubt very large supplies of high class petroleum to be got from this region, but it must be won by suitable method." Even those more cautious held out the possibility that "a lucky boring might strike a spouting reservoir of great capacity," though Mallet (1878a, 213) warned that "such an undertaking would be of a speculative kind." Dr.F.C.Gerretson (1953, 1:45-46) has explained in relation to two early failed attempts at establishing an oil industry in the Dutch East Indies that "the discovery of oil in economically workable quantities should have preceded the setting up of a company to work it. The work of a prospector had first to prove successful before an appeal could be made to the money market." These words could equally apply to Arakan. Speculative optimism, not oil, fuelled Arakan wells.

In 1889 Noetling (Letter to the editor, Rangoon Gazettle weekly Budget, 10 September 1889, 15) reminded an oil pamphleteer, Charles Marvin, who had enthused over the Yenangyaung fields, of the existence of the Ramree and Cheduba oil fields, both of which had failed to fulfil their prospectors' hopes. Thus failure of the Arakan fields seems to have contributed to early commercial disinterest in the Yenangyaung fields after annexation.

As production slowed in Arakan, interest waned. The 1908-09 visit of Pascoe to Arakan provides an interesting postscript to the industry. On Ramree, Pascoe met a Mr M Carren, formerly employed by the Australian Oil Company, who told him that the richest well he had dug during his twenty-five years on the island had produced 30 barrels (1,200 gallons) on the first day. Pascoe then described another well, known as "Bernard Well [which] reached a depth of 1,000 or 1,200 feet but struck no oil" (Pascoe 1912, 191). Other wells were also bored to depths of 1,000 feet (304 m) with only limited results (Corley 1983, 1:24). This contrasts dramatically with Yenangyaung (Myanma Oil Corporation n.d., 4-5), where twenty eight oil sands have been identified, the most extensive of which lie between 2,000 and 3,000 feet (609 and 975 m) while the lowest productive sand was reached at 3,900 feet (1,188 m).

In 1912 John Cargill, Chairman of Burmah Oil Company, the pre-emi-nent oil company in Burma, appeared before a royal commission and was questioned about reports of oil in the Arakan Islands. He replied that his company had certainly "examined the territory," but his geologists were "not favourably impressed with it. In his monograph, Pascoe (1912, 183-84 and 199) mentioned the work of a Burmah Oil geologist, H.J.Davies on Ramree and Western Boronga Islands.

In later years special regulations were introduced by the British administration in an attempt to prolong the life of the Arakan industry. Leases were “limited to a maximum of one acre [0.405 ha] and to a duration of ten years” (Brown and Day, 370). Eventually, however, all commercial production ceased. Today there still exists what is described as a hand-dug well industry on East “Baronga,” or Boronga Island. These privately-owned wells are usually worked individually by partnerships of five, with the oil being extracted daily by simple tripod pumps. The oil is refined by local agents who shell the by-products: diesel, kerosene, and wax for local consumption (Cummings and Wheeler, 361).