Wednesday, 13 February 2013 16:53 Saw Zin Nyi
Mizzima has learned that a dispute has arisen between Shweyathi Petroleum Co. and the group of people who have leased the company's oil blocks.
The company has leased oil blocks in Padaukpin Village, Magwe Division, to local businesspeople and has permitted the leaseholders to drill for oil in return for selling the oil back to the company at a bargain price.
However, the leaseholders have accused the company of not keeping up their side of the deal, particularly in the area of safety at the rigs.
Ko Soe, a businessman who rents oil blocks from the company said, “The company buys oil at a low price but whenever a fire breaks out, we have to shoulder the responsibility.”
“Fire broke out at my blocks, and I lost about 50 million kyat (US $58,445),” said another businessman who rents oil blocks. “The company did not give out any compensation, so we had to pay money to the workers who were injured.”
When Mizzima contacted Shweyathi Petroleum Co about the issue, they refuted the leaseholders' disputes.
“We have to pay taxes [on the oil], so we cannot increase the oil price,” said Dr. Tun Tun Win, the company's managing director.
“Whenever fire breaks out [at the blocks], we help them as much as we can. We do not shoulder full responsibility because the block owners [the people who have rented the blocks from the company] must take full responsibility.”
The Shweyathi Company leases the oil blocks at 300,000 Kyat ($350) per block per month.
The leaseholders sell the oil back to the company for 85,000 Kyat ($99) per barrel. On the black market, the price is about 110,000 Kyat ($128) per barrel, according to the leaseholders.
On October 9, The New Light of Myanmarreported that a local worker was badly injured when a fire broke out at one of the blocks.
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Related articles:
- L&T gives PETRONAS $100 million contract
- Foreign firms invited to bid for Burma’s onshore oil blocks
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