File Photo of a team of well diggers in
1910. Pic: "A History of the Burmah Oil Company"
Originally known as The Burmah [Myanmar] Oil Company Ltd, Burmah
[Myanmar] Castrol PLC is the oldest oil enterprise in the United
Kingdom. It is best remembered for having survived in 1975 the
most serious crash hitherto in the business history of the United
Kingdom and for achieving what was termed by John Davis of Money
Observer, November 1988, “one of the greatest corporate
comebacks of all time”.
While it once aimed to be a multinational integrated petroleum
concern, Burmah [Myanmar] Castrol transformed itself in the late
20th century into a firm focusing exclusively on marketing lubricants
and specialty chemicals. Through the Castrol brand, the company
is the world’s leading supplier of automobile and motorcycle
lubricants, including engine oils, transmission fluids, and brake
The company has more than 150 subsidiaries operating in about
55 countries. Approximately 10 percent of the company’s
revenues are derived within the United Kingdom, 27pc within the
remainder of Europe, 31pc within the Americas, 17.5pc within Asia,
12pc within Australasia, and 2.5pc within Africa.
The company derives its name from the centuries-old oil works
in Myanmar(Burma) – spelled with an “h” in the
Victorian era – which in 1886 became a province of the Indian
empire. Founded that year in Glasgow by David Cargill, a Scottish-born
merchant with lucrative trading interests in Ceylon, The Burmah
[Myanmar] Oil Company Ltd. introduced new technology into the
Burmese operations, such as mechanical drilling at the oilfields
and continuous distillation in the Yangon refinery.
file photo of a team clearing out an oil bore in Yenangyaung
in 1905. Pic: "A History of the Burmah Oil Company"
The oilfields and refinery were connected by a 275-mile pipeline
in 1909. Initially all the oil was sold in Myanmar, apart from
some wax for the United Kingdom, but the company was soon shipping
products to mainland India, using its own tankers after 1899.
Following its entry into the subcontinent, Burmah [Myanmar]
Oil came to the attention of the Committee of Imperial Defence,
the United Kingdom’s top strategic policy-making body, which
alerted the appropriate government departments to the company’s
vital importance as the only oil company of any size in the British
In 1905 the Admiralty concluded a long-term contract to purchase
Myanmar fuel oil, as it was beginning to convert its warships
to run on oil. Admiralty officials also sought to interest Burmah
[Myanmar] Oil in acquiring a 500,000-square-mile oil concession
in Persia, granted in 1901 to William K D’Arcy. Since D’Arcy
was short of money, the concessions might well have had to be
sold into non-British hands. Burmah [Myanmar] Oil agreed to the
purchase, and in 1908 its drillers struck oil in Persia.
The following year it established the Anglo-Persian Oil Company
(renamed Anglo-Iranian in 1935 and British Petroleum in 1954),
an almost wholly owned subsidiary. Difficulties over refining
and transporting the Persian oil proved costly for Burmah [Myanmar]
Oil, and in 1912 the chairman, Sir John Cargill, son of the founder
David Cargill, refused to finance Anglo-Persian any further.
Winston Churchill had recently been appointed first lord of the
Admiralty, and was seeking reliable sources of naval fuel oil
to supplement those from Rangoon. In 1914 the UK authorities and
Burmah [Myanmar] Oil concluded an agreement which overcame their
respective problems. The government acquired from the company
a majority share in Anglo-Persian, while in turn the Admiralty
obtained long-term fuel oil supplies from Anglo-Persian. During
World War I, Burmah [Myanmar] Oil concentrated on keeping India
supplied with kerosene.
After 1918 it became more widely known through its newly appointed
managing director, Robert I Watson. Energetic and highly respected
throughout the oil world, Watson helped to devise the market-sharing
international agreements that supported oil prices during the
Depression between the wars and rationalised distribution methods
throughout much of the world.
In particular, he negotiated the Burmah [Myanmar]-Shell agreement
of 1928 that created a common distribution system for the subcontinent
of India, and acquired for Burmah [Myanmar] Oil a four percent
shareholding in Shell, of which he became a director in 1929.
Burmah [Myanmar] Oil came to the attention of the world in 1942
when Japanese forces overran a poorly defended Myanmar. To prevent
its strategically crucial assets from falling into enemy hands,
Watson authorised the destruction of the Yangon refinery and all
the installations at the oilfields.
The Allies’ reconquest of Myanmar in 1945 permitted the
company to start work again on its devastated properties there.
The scale of its efforts was modified, however, by the declared
intention of the newly independent republic of Burma to work toward
taking over all oil assets. After a short-lived joint venture
arrangement, Burmah [Myanmar] Oil agreed to an outright sale of
its interests in Burma in 1963, obtaining relatively generous
compensation since mutual goodwill was maintained to the end.
Its progressive withdrawal from Myanmar, although not from India
or Pakistan, effectively turned the company into an oil investment
trust. By the mid-1950s less than a third of its income was derived
from trading, the rest coming from its 25pc stake in British Petroleum
(BP) and its 4pc stake in Shell, both earning buoyant profits
from their worldwide activities.
Consequently in 1957 the chairman, William E Eadie, launched
a policy of diversification, notably in the western hemisphere.
Attempts to secure fair compensation from Whitehall for the Myanmar
assets destroyed in 1942, over and above a nominal ex gratia payment,
failed, when in 1965 the government of Harold Wilson, by a War
Damage Act, blocked the Burmah [Myanmar] Oil claim that had been
successfully upheld in UK courts.
– Society of Petroleum Engineers International