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Adip Kumar Phukan
Date of Publish: 2016-07-07

History of deprivation should not be prolonged

Centre should patronise OIL and ONGC in Assam


If Nagaland can get rights over its natural resources, why not Assam?


The Centre and the National Socialist Council of Nagalim ( Isak-Muivah) arrived at a conclusion about 11 months back on August 3, 2015 that Nagaland government will have exclusive rights over all natural resources in Nagaland and the Central government will have no rights, whatsoever. The decision fuelled hopes that Assam too will get rights over its natural resources. Dashing the hopes of the people of Assam, the same government at the Centre has decided just the opposite in case of Assam’s natural resources. Union cabinet chaired by Prime Minister Narendra Modi decided to auction 69 gas and oil fields with oil and gas reserves of an estimated Rs 70000 crore and hand these over to Corporate groups on the ground. On june 25, Union Minister of State ( Independent charge) for Petroleum Dharmendra Pradhan announced that the bidding process for 12 oil and gas fields of Assam would begin on July 15. The Centre and the Petroleum Minister has argued that it had not been possible for the Oil India Limited (OIL) and Oil and Natural Gas Corporation Limited (ONGC) to maintain the smaller oil fields as productive due to lack of infrastructure and investments and therefore steps had been initiated to auction these small oil fields lying idle. 

The Union Minister said that such a step had been initiated to bring about a revolutionary change in Assam’s oil sector. He insisted that asset worth Rs 17,000 crore has been lying unutlised which can change Assam’s future and has brought an opportunity for Assamese people to become the owner of this asset. Petroleum Minister’s statement, comment and announcement are clearly reflects their attitude towards Assam and its people. All parties and organisations and conscious citizens of Assam should challenge the Union Minister with information, arguments and strong words. It is high time to oppose any system that allows anyone to  make such statements in Assam and impose decision with a feudal mindset in their interests.     

The question arises here is, if experienced oil explorer and producer like OIL and ONGC which are equipped with state-of-the-art technology cannot produce oil from these oil fields then which other organisation is capable of doing it.  The oil fields of OIL, which the Centre wants to auction are Sapekhati, Jeraipathar, Sarojini, Duwarmora, Dipling, Kherem. Those of ONGC are Lakhmijan, Bihbor, Uttar Pothoria, Pothoria, Charaideu and Borsila. Each of these oil fields have three to four oil wells. OIL and ONGC had done survey and exploration in these fields. OIL found crude in three wells of Jerai oil field. However, locals resisted oil exploration in Jerai oil fields as a mark of protest against the failure of the government to take acceptable decision in respect of Rohmoria embankment. If the government shows goodwill the problem can be resolved. Oil is stil being extracted from Sarojini oil field. Oil was found in Sapekhati. One well was given to a private entity but they failed to extract oil.   Oil was also found in Duarmora. In such a situation what is there any justification of handing over these oil fields to private entities?  The Chairman and Managing Director of OIL stated in the 56th general meeting that over the past one decade the OIL entered global oil and gas sector and expanded its operation to ten countries for off shore exploration-production. It has picked equity in heavy Oil block of Venezuela, shale oil block in United States and oil fields of Russia. Under the New Exploration and Licensing Policy, the OIL has also achieved success in K.G. onshore basin, Rajasthan onshore and Mumbai. It has also purchased shares in companies engaged in Nigeria, Sweden and Mozambique oil fields. What is justification auction these two oil fields of OIL after it aquired such a global status? The Centre should invest Rs 4000 crore, which it wants to invest in Assam by autioning the 12 oil fields, in OIL and ONGC so that they can go for full scale production in these oil fields. Why the OIL has not taken any step to increase its production in Assam  when it has invested the profits earned from production of crude oil in Assam outside the state and also in foreign countries?  The OIL has invested in solar and wind power projects in Gujarat and Madhya Pradesh with the profits earned in Assam. Why should the OIL shy away from production in six oil fields?  OIL earned Rs 9586.62 crore in 2013-14 and the earnings increased to Rs. 9748 in 2014-15. It produced 3.502 million tonnes of crude oil in 2013-14 which declined to 3.440 million tonnes in 2014-15. What is the reason behind fall in crude production of OIL in Assam? Why has not the Modi government initiated any step for increasing the production? Apart from the Modi government, the role of OIL too has come under a cloud. Some vested interests have conspired in the interests of multinational companies to weaken the public sector oil companies having earned Navaratna status. Such a conspiracy must be foiled. OIL should be strengthened in the public sector in the interest of Assam and its people. We should be able to challenge the forces of evil.   

Role of Centre comes under a cloud :

The history of oil refineries in India started in Assam. October 19, 1889 is a Red Letter Day in the history of Indian oil industry when crude oil was found at Barbil in Digboi.  A small refinery was set up at Margheria to refine the crude oil produced in Digboi but later in 1901 the erstwhile Assam Oil Company set up a refinery of 0.50 million tonne capacity refinery in Digboi in 1901. The hard reality is that the second refinery was set up in Assam 61 years after the first refinery of Asia was set up in Digboi. This second refinery of one million tonne capacity of the state set up at Noonmati in Guwahati is also the first public sector refinery in India. The third refinery—Bongaigaon refinery was set up in Bongaigaon. The production capacity of 1-million tonne capacity Bongaigaon refinery set up in 1979 was increased to 1.35 million tonnes in 1986, to 2.35 million tonnes in 2003. The fourth refinery- Numaligarh refinery with 3 million tonnes capacity was commissioned on July 9 in 1999. The capacity of Digboi refinery, which was set up in 1901, was increased from 0.50 million tonnes 0.65 millionn tonnes after 95 years. Combined refining capacity of the four refineries in Assam is 7 million tonnes. The Central government has decided to increase the production capacities the country’s refineries by 43 per cent from existing 216 million tonnes to 310 million tonnes by 2017. The production capacity of Numaligarh refinery is proposed to be increased to 9 million tonnes under this plan of increasing the combined capacities of  the country’s refineries by additional 94 million tonnes. However, no decision has been taken to increase the production capacities of the other three refineries in Assam. People of Assam resorted to movements to compel the Centre to set up three of the four refineries in the state.  Perhaps that is why the Centre treats the refineries in Assam to be only products of movements and therefore has not taken any step for upgrading these. Decisions taken by the Centre, in respect of refineries outside Assam, force us to derive such conclusion. A 2-million tonne capacity oil refinery was set up at Barauni in 1964 to refine crude oil produced in Assam. Its production capacity was increased to 3 million tonnes in 1969 after five years of its establishment. It was further increased to 6 million tonnes and the Modi government now plans to invest Rs 25000 crores to increase its capacity to 9 million tonnes.  Haldia refinery in West Bengal set up in 1975 had a capacity of 2.5 million tonnes. It was increased to 2.75 million tonnes in 1989-90, 3.75 million tonnes in 1997 and to 7.5 million tonnes in 2005. The Mathura refinery in Uttar Pradesh had 6 million tonnes refining capcity in 1982. It was increased to 8 million tonnes in 2000 and the present Modi government has increased it to 11 million tonnes. In 1998, Panipat refinery with 6 million tonne capacity was set up in Haryana. Its capacity was increased to 12 milion tonnes in 2000 and to 15 million tonnes in 2010. The Modi government has invested Rs. 15000 crore to increase its production capacity to 20.2 million tonnes by 2020. Kayali refinery in Gujarat had a capacity of 4.2 million tonnes in 1974-75. This was increased to 13.7 million tonnes in 1999. The decisions taken by the Central government for increasing the production capacities of the country’s refineries have been mentioned here to seek clarification from the Centre towards Assam.  

Only 0.15 million tonnes was added to Asia’s first refinery- Digboi refinery after 95 long years to increase it capacity from 0.50 million tonnes to 0.65 million tonnes.  Similary only 0.25 million tonnes was added to the country’s firsr public sector refinery at Noonmati set up with help of Romanian technology in 1961 increasing it from 0.75 million tonne to 1-million tonne. We would like to ask why Digboi, Noonmati and Bongaigaon refineries of Assam were not included the proposed plan of increasing the production capacities of the country’s refineries by additional 94 million tonnes by 2017. Why the parliamentarians from Assam had not raised their voice in the interest of Assam? The forces which are out to deprive Assam might put forward the argument that the refineries in Assam can be run only at their production capacities with the quantity of oil produced in the state. We would like to ask them as to which of the refineries in different states of the country are refining crude oil produced in those states? Most of these are refining crude oil imported other countries. 75 per cent of the total crude required for the country’s refineries is imported. Indian refineries have been producing petroleum products by refining crude imported from United States, China, Russia, Sudan, Iran, Iraq, Libya, Egypt, Australia, Vietnam, Myanmar and Qatar. Imported crude is now also refined at Bongaigaon refinery. The country’s fire crude oil pipeline of 1167 km length was set up to transport crude oil from Assam to Barauni refinery in Bihar. After Numaligrah refinery was commissioned this came to halt in October 2000. Till then, more than 100 million tonnes of crude was taken from Assam to Barauni over a period of 35 years. It is high time steps are taken to prevent a crisis situation in refineries in Assam which are running with low capacities. It may be mentioned that Hindustan Petroleum Corporation has set up and running five refineries – 8.30 million tonnes capacity in Andhra Pradesh, 9.50 million tonnes in Kerala, 9 million tonnes in Punjab, 12 million tonnes in Maharashtra ans 6 million tonnes in Madhya Pradesh. Chennai Petroleum has set up 10.50 million tonnes capacity refinery in Tamil Nadu. Reliance company has set up two refineries of 33 million tonnes and 27 million tonnes capacity in Gujarat. Essar Oil Limited has set up 20 million tonnes capacity refinery in Gujarat. Assam has been deprived for too long. The history of deprivation should not be prolonged.

Centre to invest Rs 80000 crore in Assam:

The Centre has announced in its vision document 2030 for Northeast that it would invest more than Rs 80000 crore in the existing oil and gas fields  and for new exploration. The Centre has set a target of increasing crude oil production in Assam from 4.54 million tonnes to 5.74 million tonnes by 2029-30. Will it require Rs. 80000 crore for increasing the production by just 1.20 million tonnes over a period of 15 years?  Has any multinational eyed this huge investment proposed by the Centre? Or, is the proposed investment targeted to benefit any multinational company? Any decision to weaken public sector oil company like OIL is not acceptable. The Centre has kept the post of Chairman and Managing Director in OIL vacant for more than year since June 30, 2015.  Why has the OIL been kept headless by depriving eligible candidates from Assam?

The centre should patronise OIL and ONGC more and compel them to go for production in these 12 oil fields. Modi government should initiate measures to ensure that the people of Assam are not forced to derive the conclusion that they have been deprived once more. Prime Minister should ensure that its decision does not push the alliance government in Assam headed by Sarbananda Sonowal into a crisis.

Adip Kumar Phukan

( Adip Kumar Phukan is a veteran journalist, political commentator, economic analyst, columnist and a writer based in Guwahati. He can be contacted at 9707024612. Views are author’s personal ) 




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