Myanmar’s junta last week issued an order to shut down all private oil wells in the central Magway region, a move that could affect some 300,000 workers in the industry.
The decree, which came without warning and without giving any reason for the closure, immediately forced businessmen in the oil fields in Magway’s Min Hla and Thayet townships to halt production and abandon their wells.
Owners and workers of the oil wells told Radio Free Asia that the military ordered the closure out of fear that tax revenue from the operations would be used to finance the People’s Defense Forces paramilitary groups fighting the military, who seized control of the country in a 2021 coup.
Among those affected by the ban was a businessman who had invested 40 million kyat (US$19,000) in three oil fields.
“I have lost a lot in the Da Hat Pin oil field in Min Hla township where I currently reside,” said the businessman who, like other oil well owners interviewed for this article, spoke to RFA Burmese on condition of anonymity. , citing security concerns. “I didn’t even have money left for food in the Na Lal oil field.”
The businessman said that after the board closed the fields where he operates wells, he “lost everything I invested,” leaving him broke.
The third well it operated is located in the Tet Ma oil field in Mandalay’s Nyaung-U township, where officials shut down operations on May 21 after having issued a notice the day before at the behest of the township board. The notice threatened “serious action against anyone who violates the ban.”
“I have nothing left,” he said.
Those who only lost their source of income as a result of the shutdown can consider themselves relatively lucky. Others have lost their life savings or taken on debt to finance their entry into the industry and now find themselves in a much different hole than the one they dug for oil.
Another businessman who invested 42 million kyat (US$20,000), including a 20 million kyat (US$9,500) loan, to start up his wells on October 1 last year, said he has since lost everything and now faces insurmountable debt. .
“I will never be able to repay this loan working on the plantations now that the oil wells have been shut down,” he said. “If I can’t keep up with my oil well this year, I’ll never be able to repay this loan in my life.”
The businessman compared the closure of oil wells with “killing us.”
“Not just me, more than 100,000 workers and their families have been affected by the shutdown,” he said. “I’m really upset, but I can’t do anything about it. I had to stop working and return home as ordered.”
He said the board had surprised oil well owners with the sudden closures, including those who had invested “hundreds of millions” of kyat in their operations.
Wells left unattended can become inoperable, and the owners said they are desperately waiting to hear if they will be able to restart production.
Tax revenue under scrutiny
Bagan Gyi, a soldier with the Nyaung-U People’s Defense Force, which is against the junta, said the closure of the Tet Ma oil fields has stifled the local economy.
“Many surrounding towns depend on the oil field for their livelihood,” he said. “The junta has shut down their economy with this shutdown… (It’s a) deliberate attempt to make people suffer.”
Bagan Gyi also said that he believes the junta closed the oil field to cut off funding for the PDF. He did not give a definitive answer when asked if the PDF is receiving tax money from oil well businesses in the region.
But a resident of Magway’s Myaing township with ties to the oil industry said the PDF receives funds from his taxes, which is why the board recently ordered the closure of private wells there and in the nearby township of Pauk.
“The PDF even has some oil wells of their own and they get income from the wells in other ways as well,” the resident said. “What I can say with confidence is that the military must have calculated that PDF business transactions would stop if the oil fields were closed.”
Magway residents said junta troops conducting cleanup operations in the region have set private oil wells on fire, while PDF groups have also attacked military units stationed in oil fields.
More Closures Likely
The Deputy Information Minister, Maj. Gen. Zaw Min Tun, did not respond to RFA’s inquiries about the oil well closures at press time.
But Thein Tun Oo, executive director of the Thayninga Institute for Strategic Studies, made up of former military officers, said he was not surprised that the board closed the oil fields in Magway.
“If the military assumes that the revenue from the oil fields is funding the PDF, they will definitely shut down,” he said. “Any government would work to prevent local businesses from funding illegal terrorist organizations.”
Thein Tun Oo said he expected the junta to shut down more oil fields used for private wells in the future, adding that authorities in countries under martial law may restrict people’s rights and property if they are seen as contributing to an “emergency.” national”.
Meanwhile, private oil well owners who, in some cases, entered the industry only months earlier to escape rising costs and erratic weather conditions affecting farm work, suddenly find themselves jobless and in debt due to to the ban.
“Shortly after I bought two wells and extracted some oil to sell, now I have to go back home, leaving everything I invested,” said a businesswoman who spent 20 million kyat on her operations but only earned about 3 million kyat. kyat ($1,430) before closing.
“People in my area have invested tens of millions of kyat in this business and they are all devastated now that the oil fields have been closed and they are left with nothing.”
Translated by Myo Min Aung. Edited by Joshua Lipes and Malcolm Foster.