Burmah Oil

Burmah Oil was a British oil company established in Glasgow in 1886 by David Sime Cargill, an East India merchant. It was created as the successor to the Rangoon Oil Company and was intended to expand oil exploration, production, refining, transport and marketing in the Indian subcontinent. Although its corporate base was in Scotland, the company’s early commercial identity was closely connected with the oil fields and markets of Burma, then part of the British Empire. During the late nineteenth and early twentieth centuries, Burmah Oil became one of the most important petroleum enterprises operating in British-ruled Asia. It initially benefited from a strong position in Burma and, until Standard Oil entered the market in 1901, enjoyed a regional monopoly. Its activities included the production and sale of crude oil and petroleum products, and it later marketed products under the BOC name in Burma, Bangladesh, formerly East Pakistan, and Assam. In other parts of India, its distribution presence was developed through Burmah-Shell, a joint venture with Shell. The company’s influence extended well beyond its direct Burmese operations. In the early twentieth century, Burmah Oil supported the development of exploration in Persia and held a 97 percent interest in the Anglo-Persian Oil Company, which succeeded William Knox D'Arcy’s early Persian prospecting activities. Anglo-Persian later became the Anglo-Iranian Oil Company and ultimately formed a major historical component of BP. Burmah Oil therefore played an indirect but important role in the emergence of one of the world’s largest international oil companies. Burmah Oil also became strategically significant to the British state. In 1905, it signed an agreement to supply fuel oil from Rangoon to the Admiralty, at a time when the Royal Navy was considering the transition from coal-fired propulsion to oil fuel. This relationship connected the company to British naval logistics and the broader strategic importance of petroleum. Its record in Burma was also marked by labor and nationalist conflict. In 1938, Burmah Oil became a target of the major nationalist protest and general strike known as the 1300 Revolution. The company eventually accepted some of the demands made during the dispute, although the strike ended largely after prolonged exhaustion. In 1942, during the Japanese invasion of Burma, British forces destroyed oil installations to prevent them from being captured. The resulting compensation dispute led to the landmark 1964 legal case Burmah Oil Co. v Lord Advocate. The company won a narrow decision before the Judicial Committee of the House of Lords, but Parliament subsequently restricted the practical effect of that ruling through the War Damage Act 1965. Burmah Oil’s direct presence in Burma ended in 1963 after Ne Win’s government nationalized industries. The nationalized assets contributed to the creation of Myanma Oil and Gas Enterprise. Following its withdrawal, Burmah Oil pursued exploration and other petroleum activities in India, Pakistan, Bangladesh, Australasia, the Americas, Canada and the North Sea. In 1966, it acquired Castrol and changed its name to Burmah-Castrol, adding a major lubricants and automotive-products business to its portfolio. The company suffered severe financial pressure after large losses connected with its tanker fleet in 1974. The Bank of England supported a rescue designed to give Burmah Oil time to reduce its scale and return to viability, including a one-year period of grace and guarantees covering 650 million US dollars of foreign-currency borrowings. Burmah-Castrol remained a significant listed British company and was once a constituent of the FTSE 100 Index. In 2000, BP Amoco acquired Burmah, bringing its remaining businesses, including the Castrol operations, into the BP group. The Burmah Oil corporate entity consequently ceased to operate as an independent company.

Burmah Oil originated in Glasgow in 1886, when East India merchant David Sime Cargill founded the Burmah Oil Company as the successor to his Rangoon Oil Company. The new company was established to expand the development of oil fields in the Indian subcontinent, particularly in Burma. Its Scottish corporate base and Asian operating footprint became defining features of the business. In its early decades, Burmah Oil developed a commanding position in Burma’s petroleum sector. The company produced and marketed crude oil and petroleum products and, until Standard Oil began operating in Burma in 1901, held a regional monopoly. Its importance increased as petroleum became strategically valuable to the British Empire. In 1905, Burmah Oil agreed to supply fuel oil from Rangoon to the Admiralty, supporting the Royal Navy’s planned movement away from coal-fired propulsion. After David Cargill died in 1904, ownership and chairmanship passed to his son, John Cargill. During the first decade of the twentieth century, Burmah Oil also became deeply involved in Persian exploration. It established the Anglo-Persian Oil Company as the successor to William Knox D'Arcy’s early prospecting work in Persia and retained a 97 percent interest. Anglo-Persian later became the Anglo-Iranian Oil Company and eventually BP. Through this relationship, Burmah Oil exerted influence over the development of Middle Eastern oil even though its own commercial origins were in Burma and India. The company expanded its marketing network through the BOC brand in Burma, Bangladesh, formerly East Pakistan, and Assam. In the remainder of India, it operated through Burmah-Shell, a joint venture with Shell. These arrangements gave Burmah Oil a broad presence in the distribution of petroleum products across South Asia. Burmah Oil’s position in colonial Burma generated political and labor opposition. In 1938, it was one of the targets of the 1300 Revolution, a major nationalist protest and general strike. The company eventually made some concessions, but the strike concluded primarily after the participants became exhausted. During the Second World War, British forces destroyed Burmese oil fields and facilities in 1942 to prevent their capture by invading Japanese forces. This action produced a long-running compensation dispute. In 1964, the Judicial Committee of the House of Lords decided Burmah Oil Co. v Lord Advocate by a three-to-two majority in favor of the company. Parliament then enacted the War Damage Act 1965, which specifically removed the broader practical consequences of that ruling. In 1963, Ne Win’s government nationalized industries in Burma, forcing Burmah Oil to leave the country. The nationalized assets helped form Myanma Oil and Gas Enterprise. Burmah Oil responded by pursuing exploration in a wider range of regions, including India, Pakistan, Bangladesh, Australasia, the Americas, Canada and the North Sea. The company’s international reach continued, but its historic Burmese foundation had been removed. A major strategic change occurred in 1966, when Burmah Oil acquired Castrol. The transaction broadened the company beyond upstream oil and conventional petroleum distribution into lubricants and automotive products. Burmah Oil was renamed Burmah-Castrol and became a prominent British listed company; it was at one stage a constituent of the FTSE 100 Index. The company encountered a serious financial crisis in 1974 after large losses associated with its tanker fleet. The Bank of England organized support that gave Burmah Oil a year to become smaller and more viable and guaranteed 650 million US dollars of foreign-currency borrowings. The intervention allowed the business to continue, but it underscored the risks created by its shipping and international financing exposure. Burmah-Castrol remained active until BP Amoco acquired the company in 2000. The acquisition ended Burmah Oil’s independent corporate history and transferred its remaining operations and brands into BP’s group structure. Its historical importance rests on its role in South Asian petroleum, its contribution to the origins of BP through Anglo-Persian, its connection to British naval fuel policy, and the legal and political controversies surrounding its Burmese operations.

• 2000

  Acquisition by BP Amoco

  [1]Burmah Oilen.wikipedia.org

  BP Amoco acquired Burmah, ending its independent corporate existence.

• 1974

  Bank of England rescue

  [1]Burmah Oilen.wikipedia.org

  The Bank of England supported the company after tanker-fleet losses, including a restructuring period and guarantees for foreign-currency borrowings.

• 1966

  Castrol acquisition

  [1]Burmah Oilen.wikipedia.org

  Burmah Oil acquired Castrol and adopted the Burmah-Castrol name.

• 1964

  Burmah Oil Co. v Lord Advocate

  [1]Burmah Oilen.wikipedia.org

  The Judicial Committee of the House of Lords issued a narrow decision concerning compensation for the wartime destruction of Burmese oil installations.

• 1963

  Withdrawal from Burma

  [1]Burmah Oilen.wikipedia.org

  Burmah Oil left Burma after nationalization under Ne Win; its nationalized assets contributed to Myanma Oil and Gas Enterprise.

• 1938

  1300 Revolution and general strike

  [1]Burmah Oilen.wikipedia.org

  Burmah Oil became a target of a major nationalist protest and general strike in British Burma.

• 1910

  Anglo-Persian Oil Company established

  [1]Burmah Oilen.wikipedia.org

  Burmah Oil helped establish Anglo-Persian Oil Company and retained a 97 percent interest, creating an important predecessor to BP.

• 1905

  Admiralty fuel agreement

  [1]Burmah Oilen.wikipedia.org

  Burmah Oil contracted to supply naval fuel oil from Rangoon as the British Admiralty evaluated the transition from coal to oil.

• 1904

  John Cargill succeeds David Cargill

  [1]Burmah Oilen.wikipedia.org

  Following David Sime Cargill’s death, his son John Cargill assumed ownership and the chairmanship.

• 1901

  End of Burmah Oil’s regional monopoly

  [1]Burmah Oilen.wikipedia.org

  Standard Oil began operating in Burma, ending Burmah Oil’s previous monopoly in the market.

• 1886

  Burmah Oil Company founded in Glasgow

  [1]Burmah Oilen.wikipedia.org

  David Sime Cargill established Burmah Oil as the successor to the Rangoon Oil Company to expand petroleum development in the Indian subcontinent.

Historically, a vertically integrated British oil enterprise focused on exploration, production, petroleum distribution and strategic fuel supply across South Asia and other international markets.

• Upstream petroleum · 1886

  Crude oil

  Crude oil production was central to Burmah Oil’s original business in Burma and the Indian subcontinent. The company’s early expansion was built around developing regional oil fields and connecting production with export, refining and distribution activities.

• Refined petroleum products

  Petroleum fuels

  Burmah Oil marketed petroleum products across South Asian markets through its BOC operations and the Burmah-Shell joint venture. Its fuel business served civilian, industrial and transport demand and also supported strategic supply relationships with the British state.

• Marine fuels · 1905

  Marine fuel oil

  Marine fuel oil became a strategically important offering when Burmah Oil contracted with the British Admiralty in 1905 to supply fuel from Rangoon. The agreement reflected the increasing military importance of petroleum during the Royal Navy’s transition away from coal.

• Lubricants · 1966

  Castrol lubricants

  Castrol became part of Burmah Oil’s portfolio after the 1966 acquisition. The business added branded lubricants and automotive products to Burmah’s exploration, fuel and petroleum-distribution activities and was central to the Burmah-Castrol identity.

• 2000

  Accept acquisition by BP AmocoM&A

  Background

  Burmah-Castrol remained a significant British oil group but no longer operated as an independent company after BP Amoco’s approach.

  Action taken

  BP Amoco purchased Burmah.

  Aftermath

  Burmah Oil’s independent corporate history ended and its remaining businesses were integrated into BP’s group.

  Source

• 1974

  Restructure after tanker-fleet lossesStrategy

  Background

  Large losses on the company’s tanker fleet placed Burmah Oil under severe financial pressure.

  Action taken

  With Bank of England support, the company received a year to become smaller and more viable. The bank also guaranteed 650 million US dollars of foreign-currency borrowings.

  Aftermath

  The rescue enabled Burmah Oil to continue operating while reducing its scale and financial exposure.

  Bank guarantee of foreign-currency borrowings. 650 million US dollars (1974)

  Source

• 1966

  Acquire CastrolM&A

  Background

  Burmah Oil sought to expand beyond conventional exploration and petroleum distribution.

  Action taken

  The company acquired Castrol and changed its name to Burmah-Castrol.

  Aftermath

  The acquisition created a larger presence in lubricants and automotive products and became a defining element of the company’s later identity.

  Source

• 1963

  Withdraw from Burma and broaden explorationStrategy

  Background

  Ne Win’s government nationalized industries in Burma, removing Burmah Oil’s historic operating base and transferring its assets to the state.

  Action taken

  Burmah Oil left Burma and pursued exploration and petroleum activities in India, Pakistan, Bangladesh, Australasia, the Americas, Canada and the North Sea.

  Aftermath

  The company became more geographically diversified, although it no longer controlled the Burmese assets that had defined its origins.

  Source

• 1905

  Enter strategic naval fuel supplyStrategy

  Background

  The British Admiralty was considering replacing coal with fuel oil for warship propulsion, creating a strategically important market for reliable petroleum suppliers.

  Action taken

  Burmah Oil signed an agreement to supply naval fuel oil from Rangoon.

  Aftermath

  The agreement strengthened the company’s relationship with the British state and illustrated the strategic importance of its Burmese production base.

  Source

1. 1Burmah Oilen.wikipedia.org