Thousands seize chance to profit from abandoned wells in spirit of enterprise denied under former military regime
At the end of the last dirt road in Thayet, Maung Ko Oo, 25, is standing thigh-deep in a pit of crude oil, his longyi tied up high around his waist, a sweaty vein of black tar streaked across his forehead. His boss – a round-faced man sporting a baseball cap and ruby ring – is standing over him, shouting out orders to the half-dressed men relaying oil-filled buckets to the huge barrels lining their station.
As the early afternoon sun arcs high over these dusty hills in central Burma, the men climb atop the barrels and pour in the oil bucket by bucket, then roll the filled barrels up a ridge and into the back of a truck. All around them, thousands of workers are doing the same – digging for oil, drilling for oil, collecting the oil, and selling it off to local refineries – in unregulated, artisanal pits which they claim can fetch up to 300 barrels of crude oil a day, worth $3,000 (£2,000) at local market prices.
“This is easy money,” says boss Ko Win Shwe, a former miner who moved hundreds of miles to this settlement of huts and tents to find his fortune. He waves his hands to take in the barren earth stilettoed with oil-blackened drills and bares a toothy grin. “See all this land?” he says, his rubies glinting in the sun. “I bought all of it for $4,000 six months ago and struck lucky last week. Now I get 200 barrels a day. It’s easy! Such easy money.”
About 2,000 people already live here, but many more are arriving daily in search of opportunity, entrepreneurship and independence – all denied under the military regime that ruled the country for nearly 50 years. Oil was first discovered by the British in the 19th century, but the wells were abandoned, and now it is the enterprising locals who have tapped into this plentiful resource – some of whom claim to have earned millions of dollars doing so.
“We have our eyes and ears open, always, because wherever and whenever the government stops drilling, then we move in,” says Aung Win, a self-styled “oil boss” in a purple dress shirt, cowboy hat, flipflops and wraparound sunglasses. “Sometimes it can take a year for the oil to come out, so you just wait, and sometimes you have to move on. In my 24 years doing this, I’ve had to move 49 times to follow the oil.”
Here in Thayet, a township caked in dust about seven hours north of Rangoon, the oil rush began in 1989 after a farmer found crude near his land. Soon thousands of people had flooded the village, including students whose classes were cut short after the 1988 uprising. Those who have remained here since – along with a handful of wives and a fair few children – clamber under wooden derricks fashioned from bamboo and rope, the drills between them squelching out crude oil that runs into large open pits lined with tarpaulin.
Everywhere one looks, there is oil: in the fumes floating up in the midday heat, in the black rivulets snaking down the hillside, in the old barrels littering the land. But this is not the biggest “oil town”, says Aung Win: just a few hours away, roughly 20,000 drillers dig for crude at Su Win, and another 10,000 are in the neighbouring Khing Taung village.
Prospecting is a costly gamble. Land costs about $4,000 an acre, drills are $2,000, and permits – whose prices vary – must be purchased from the local refineries. Most drillers pool their resources and their profits, says boss Ko Win Shwe, as many start out drilling by hand until they can afford a generator and engine. “But it’s really paying off the officials that’s expensive,” says Aung Win, shaking his head. “They want to be taken out to sing karaoke and drink all night – it can cost $1,500 just for the bribe!”
The opportunities for wealth may be great, but there are no health and safety rules here, no environmental protection, no employee regulations.
Work continues 24 hours a day, seven days a week, and fires are a common hazard: earlier this month five men were killed when a cooking flame rollicked across the hills and nearly spread into the pits themselves.
Up at the local refinery small no-smoking signs, weathered and curling from the sun, dot the bamboo fence, but barrels of oil are stored in thatched huts and men drill nearby with cheroot (local cigars) at their lips.
“There are oil fields to the left and right all along the Irrawaddy river, and still so many basins all over [Burma] that we haven’t explored or developed yet – but the problem is that there is no good estimate of how much oil is in place,” says oil and gas expert KK Hlaing of Smart Technical Services, which helps local and international companies drill for oil. “There are around 14 basins in [Burma] but only three or four have been properly commercialised.”
As Burma has opened up under the presidency of Thein Sein, whose quasi-civilian government ended five decades of military rule in 2011, about 18 onshore blocks are now up for grabs by foreign and local firms looking to cash in on the nation’s great oil and gas reserves.
That alone may explain why government officers trailed the Guardian to various drilling sites and demanded to see travel visas, and why a very different oil rush is taking place in Rangoon.
At the Myanmar oil and gas summit earlier this month – which cost £1,500 a person to attend and was sponsored by Halliburton and the Malaysian oil firm Petronas, among others – executives spoke of the pros and cons of investing in Burma. “There is a boom here but, like in many other countries in the region, we’re the bad guys,” said one, warning that “big business can be blamed” for anything that goes wrong. He pointed to Burma’s lack of arbitration, dodgy track record in policing and the suspended Myitsone dam project as lessons to be studied.
For those drilling for oil near Thayet, however, short-term gains far outweigh any long-term fallout. Aung Win claims he lost $2m last year because of faulty drilling and dodgy business practices, and just last week lost another $70,000 at a well a few hours away. “But this is the only industry in Burma where you can lose $70,000, let alone make it,” Aung Win explains. “Nothing else in this country gives you money like this.”
Nearly everyone agrees. “It’s easy to lose the money if you don’t invest it in other areas, because sometimes you win and sometimes you lose,” says Zaw Min Tun, 37, a former farmer who has built a new house for his family and pipes his oil earnings into carwash businesses. “We just lost $50,000 because we drilled and couldn’t find any oil. But I would still recommend this business to anyone, with no reservations.”
It is impossible to verify the wealth of these seeming gamblers, but KK Hlaing says that it is highly unlikely any of them are able to tap more than 30 barrels a day due to the fact that most are drilling between 300 metres and 762 metres (1,000ft and 2,500ft), “and most of the good oil is 10,000ft or below”. In Thayet, many houses are painted in bright greens and blues and the women wear emerald and ruby earrings – but much of the village life still seems impoverished, with most villagers choosing to work at the local weapons and concrete factories instead of in the oil fields.
Still, the richest driller in this “oil town” is Kyi Nai, 41, a lithe man with a crew cut and betel-stained teeth who says he has earned $300,000 in the past six months alone. “I’ve been doing this for over 20 years, and I’ve never hit oil like that,” he says with a grin. “My hard work finally paid off. My wife is happy – she likes money.”