High costs deter oil drilling

Writer: 
Aung Thu Nyein
An oil site in Minhla Township. (Photo-Aung Thu Nyein)

Despite rising oil prices, explorers are unwilling to dig another well in Minhla Township, Magway Region, due to high production costs, sources say.

The oil price fell from Ks150,000 (US$110) per barrel to Ks45,000 in 2016. But from early this year the price has risen to Ks90,000 a barrel.

Ko Htwe, a worker in the Dahatpin oil field, said: “We now have to dig as deep as 1,500 feet. Formerly many people found oil at 100 feet or 1,000 feet at a maximum. Having to dig deeper means more costs. Some didn’t find any oil after spending Ks8 million on a well. Foreign firms are prospecting in Minhla and Thayet townships. We want the government to only permit citizens to explore oil in line with the law.”

Minhla has over 40 oil sites both legal and illegal.

A licensed oil prospector in Minhla said: “Reckless oil exploring can damage the environment. We get licences to make business official but many things in the site are outside our control. The government should enforce the law and protect both explorers and vendorsLegal oil exploring may give the residents more jobs and the government more revenues.”

The crude oil from fields in Magway is sent to a Monywa Township refinery and the firms have to pay the government Ks3,000 per barrel for development fund.

Magway government officials said they were considering issuing private oil refinery licences.

 

Translated by Nay Thiha