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History of oil production in the Irrawaddy valley

In 1998 Burma took its place among the world's gas exporters and now gas is produced from several offshore gasfields and piped to domestic consumers and to export markets in China and Thailand. But for at least two centuries oil has been produced onshore from oilfields in the broad valley of the Irrawaddy River, predating Scotland's once important oil-shale industry and even the oft-quoted birth of the oil industry in 1859 when Edwin L Drake drilled his first successful oil well at Titusville, Pennsylvania.

Following the relocation of the seat of government from Pegu to Upper Burma in 1635, a procession of British soldier-diplomats made their way up the Irrawaddy River to the court of the reigning king, from time to time at Amarapura (now subsumed within southern Mandalay) or Shwebo. Ports of call on this arduous journey included Yenangyaung and some of those early travellers made significant observations on the oil-production industry they found there.

Yenangyaung (or Yenan Chaung) can be translated as ‘creek of stinking water' and the fact that ‘yenan' became the Burmese word for ‘oil' gives a clue to what those early travellers witnessed. In 1755 George Baker and John North en route to King Alaungpaya's capital, Shwebo, found "about 200 families who are chiefly employed in getting Earth-oil out of Pitts (sic)". Forty years later, in 1795-96, Major Michael Symes was leading a delegation from the Governor-General of India to the Court of Ava at Amarapura and gave a more detailed account of the Yenangyaung riverside export point:

"...the celebrated wells of Petroleum which supply the whole empire (of Ava) and many parts of India, with that useful product were five miles to the east of this place….The mouth of the creek was crowded with large boats waiting to receive a lading of oil, and immense pyramids of earthen jars were raised in and around the village... The smell of oil was extremely offensive. We saw several thousand jars filled with it ranged along the bank. Some of these were continually breaking, and the contents mingling with the sand..."

Symes described the wellheads as being holes about four feet square; he tested the depth of one well and found it to be ‘thirty-seven fathoms' (68 m). He also described the recovery of the oil using an iron pot fastened to a rope which passed over a wooden cylinder which revolved on an axis supported by two upright posts; to raise the pot, two workers hauling on a rope ran down an inclined slope.

Hiram Cox was the Rangoon Representative of the East India Company when, less than two years after Symes' visit to Yenangyaung, he inspected the oilfield in 1797 while on a mission to the Court of Ava at Amarapura. Cox counted 180 wells in one area and another 340 a short distance away; these are thought to have been the clusters of wells at Beme and Twingon respectively (Fig. 1). Topography was a factor in determining the location of the hand-dug wells: it is a deeply dissected terrain, and the preferred locations were on small hilltops or hillsides where a level area could be excavated and where a slope ran away from the well to enable the workers to run downhill with their ropes while raising the digging-debris, or later the oil, to the surface.

Fig. 1. Simplified geological map of part of the Irrawaddy valley, showing locations of the principal oilfields: Yenangyaung, Yenangyat, Chauk and Minbu. Other small fields are present up- and downstream.

Fig. 2. Twinza worker on the Yenangyaung oilfield in 1921, showing oilwell derrick in the background. (Burmah Oil Company photo, courtesy of BP Archive)

Notwithstanding the interruptions caused by the First Anglo-Burmese War (1824 - 26) and the Second Anglo-Burmese War (which saw the annexation of Lower Burma by the British in 1853), journeys by Europeans upriver to the Court of Ava continued. The first geologist on record to have visited Yenangyaung was Thomas Oldham of the Indian Geological Survey. In 1855 he estimated there to be 200 productive wells on the field, producing 4,500,000 viss annually (a viss is 1.66 kg, meaning an annual rate of production of 7,470 tonnes. Another geologist of the Indian Geological Survey was Dr Fritz Noetling who began a systematic exploration of Upper Burma in 1888. He records that a single earthenware jar had a capacity of 12 viss (20 kg) and that there were about 150 bullock-carts per day carrying a dozen jars each down to the riverside.

From the earliest observations of the Yenangyaung oilfield by foreign travellers to the eventual annexation of Upper Burma by Britain in the brief 1886 Third Anglo-Burmese War, the rights to produce oil at Yenangyaung were granted by the rulers of the Kingdom of Ava. Those rights were held by 24 individuals called ‘twinza'. It was a hereditary entitlement, and the system was called twinzayo. A well might take up to two years to dig, obviously depending on its depth and whether the digging was hard or soft – hard, calcareous layers were tackled by dropping a very large iron weight from the surface. The digger himself was lowered on a rope to the bottom of the well where he used an iron-tipped pole as his tool, the spoil then being raised to the surface in a basket on a rope. Because of the concentration of oily vapours at the bottom of the well, as it deepened he could remain in the well for no more than about 30 seconds before being hauled to the surface. That is where the path sloping away from the well-head was important, enabling two or perhaps more men to run with the hauling rope to remove the digger from the well as speedily as possible. When oil was struck the same method was used to bring it to the surface, using iron buckets or lacquer-sealed baskets. The twinzayo system persisted long after British rule replaced the king, operating alongside the drilling rigs of the oil companies (Fig. 2).

By 1896 when geologist G.E. Grimes was mapping the oilfields he noted that the diggers' lot had improved considerably, as they were now equipped with a ‘diver's helmet' into which fresh air was pumped manually down a flexible hose from the surface, enabling them to remain digging for up to an hour, and reach depths of at least 400 ft (122 m), but it remained a hazardous operation (Fig. 3). The risk of the well walls collapsing was lessened (but not wholly overcome) by installing wooden shuttering as digging progressed.

Since 1858 there had been a small refinery at Rangoon, using Yenangyaung crude as feedstock and exporting products to Europe and India. By 1871 it was in financial trouble and its assets were bought by a group of Scottish businessmen who registered a new company in Edinburgh, the Rangoon Oil Company. Its local agent in Burma was Finlay Fleming & Co.

The annexation of Upper Burma in the 1886 Third Anglo-Burma War meant that the whole country, formerly the Kingdom of Ava, was now a part of British India administered locally by a Chief Commissioner in Rangoon. It was a major milestone in the evolution of Myanmar's petroleum industry, ushering in the modern era. In that same year, 1886, David Cargill, who was the principal shareholder of Rangoon Oil Company, sold it to another Scottish-registered company founded in the same year, Burmah Oil Company, which had technical links back home to the East Midlothian shale-oil industry. Cargill thereby acquired an interest and became Chairman of the new company.

By then another oilfield in the Irrawaddy valley was attracting attention, Yenangyat with its own crop of hand-dug wells, across the river from the ancient capital of Pagan (now Bagan). Without wasting any time, Burmah Oil applied for concessions over Yenangyat and Yenangyaung. Part of the commercial imperative behind Burmah Oil Company's haste to obtain concessions was that a number of the twinza's interests in Yenangyaung had passed by marriage to the former King, and by decree he had also acquired the right to purchase all of the twinza's own production; the result had been that the supply of crude oil to the Rangoon refinery had become erratic and threatened its viability.

Concessions were granted to Burmah Oil Company and in January 1888 drilling operations commenced using an American-style cable-tool percussion rig. The rights of the twinzas were protected in specified reserves, and by now they could sell their production to anyone, choosing in fact to sell it to Finlay Fleming & Co representing Burmah Oil, and so again an adequate supply of oil was able to be shipped to their Rangoon refinery.

Fig. 3. Twinza well-digging team in the early 20th Century, including the digger wearing a helmet into which air was pumped manually from the surface. Photograph from Pascoe (1912), "The Oilfields of Burma".

Fig. 4. Yenangyaung Oilfield in the 1920s. (Burmah Oil Company photo, courtesy of BP Archive).

But Burmah Oil's early operations at Yenangyaung went through a difficult early phase. Security was a problem during the ‘pacification' of Upper Burma, with bands of dacoit attacking the encampments, sabotaging equipment and setting fire to the stored oil. Despite frequent setbacks, the introduction of mechanized well-drilling (first with cable-tool rigs in 1888 and rotary tools in 1911) allowed hundreds of wells and eventually over four thousand wells to be drilled on the Yenangyaung field, and oil production rose to a peak of 15,953 barrels per day in 1918 (Fig. 4).

Meanwhile at Yenangyat, the local people were producing oil from hand-dug wells. Burmah Oil Company commenced drilling there in 1891 and made their first discovery on the Yenangyat anticline in 1893. By the end of the 19th Century production from the field was averaging 500 barrels per day of a lighter and better quality oil than Yenangyaung.

Toward the end of the 19th Century, as Yenangyaung production continued to climb, a third prospect was identified at the village of Singu. It was the work of geologist G.E. Grimes using a standard geological mapping approach, since no seepages or surface workings indicated its presence, apart from '...a smell of petroleum gas...'. The era of modern geologically-based exploration had arrived in Burma. Burmah Oil Company drilled the first well there in 1901, making an important oil discovery which became known as the Chauk Field, later to become the jewel in the company's crown. Sadly, Grimes didn't live to see it as he died of cholera in Burma in 1898.

With new deep wells and even the helmet-equipped well-diggers contributing to production growth, Burmah Oil's refinery capacity needed to expand. Its original refinery was at Dunneedaw near Rangoon, but then a second was built at Syriam, south of Rangoon, which in due course became the company's main refinery. Later a pipeline from the oilfields to these refineries was built in 1908.

The first two decades of the 20th Century saw the oil industry in Burma come of age: Burmah Oil Company had agreed a contract with the British Admiralty to supply fuel-oil bunkering; rotary drilling had been introduced in 1911; and geological science was being applied to field-development and exploration for new fields. Production was coming from the Yenangyaung, Yenangyat and Singu (Chauk) fields, and was beginning at Minbu. Total production was about 15,000 barrels per day.

At the outbreak of the Second World War oil production averaged 21,500 barrels per day from 3,800 wells. But the war brought oil production to a virtual standstill, and many of the wells and infrastructure were destroyed to deny them to the occupying Japanese.

Reconstruction after the war brought fields back into production and, notwithstanding the nationalization of Burmah Oil Company in 1963, new fields were discovered in the Irrawaddy valley, and production climbed to pre-war levels, peaking in the 1980s. Since then there has been a steady decline as older fields became depleted, and few large fields were discovered.

Michael F Ridd

Dr Michael F Ridd graduated from University College London in 1957, and joined BP as a geologist. During his subsequent career he lived and worked in Libya, Abu Dhabi, New Zealand, Alaska, Australia, Thailand and Singapore, ending his period with BP as Chief Geologist for their UK operations, based in Aberdeen. In 1985 he founded a small oil company, Croft, with Scottish backing, and built a portfolio of exploration and production interests including the North Sea, New Zealand, USA and Myanmar. Since retiring in 1999 Mike Ridd has devoted himself to SE Asian geology, in particular seeking to unravel the complex plate-tectonic history of the region, on which he has published a number of papers and books. He lives in London and Scotland and is married to Mikiko, a musician.

* This article is based on ‘Historical background to Myanmar's petroleum industry' by M. F. Ridd and A. Racey, Chapter 4 of ‘Petroleum Geology of Myanmar,' Memoir of the Geological Society, London, 2015. Other source is: ‘Oil in Burma, the Extraction of "Earth-Oil" to 1914' by M.V.Longmuir, 2001, White Lotus, Bangkok.