Nov 17, 2009 (DVB), A government-backed oil company in Burma has hired thugs to beat and arrest locals in the country's northwestern Sagaing division who are digging for oil in private wells.

Future Company Limited has been granted permission by Burma's military government to monopolise crude oil from hand-dug wells in the Pauktaw oil field, close to Kalay township.

A local oil digger told DVB that locals are being forced to sell oil to the company at reduced rates, or otherwise face attacks from thugs hired by the company, who often hand them to police.

The company buys one barrel of oil for 60,000 kyat ($US60) while locals claim they can sell to private buyers for 100,000 kyat ($US100).

"They hired some men to beat up and arrest people," he said. "Locals have been doing this business for a lifetime and now face problems because this company taking advantage of them."

"The well owners just sell oil to anyone who reaches to them first; the wells are their own so they sell to buyers who pay them more."

He said that one man who was shot by the hired thugs is now in hospital, while another three people were recently hospitalized after being beaten.

"They also sued those people who they beat up," adding that the one person who tried to sue them back was threatened with a gun.

Another local said that regional members of the army are involved in the beatings. "They have thugs from different parts of the country working as security and fire maintenance," he said. "Sometimes they hire the military to arrest people."

He said this is happening because the government had failed to draw up any plans for the welfare of the locals before they started selling contracts to oil companies.

In recent days a villager near to the Pauktaw oil field has reportedly urged local authorities to act on the alleged beatings.

Future Company Limited were not available for comment.

Reporting by Aye Nai