Congress opposes Centre's decision to auction Assam's 12 small oil fields

Assam’s main opposition party, the Congress party, has opposed the Centre’s decision to auction 12 of the state’s small oil fields; starting July 15. The party has cast doubt on the intention of the Centre and said such move might be aimed at benefiting “some private industrialists” having good relation with the central government.  

In a letter addressed to the state’s chief minister, leader of the opposition of Assam assembly and also Congress party member, Debabrata Saikia, said though a draft policy was prepared under the United Progressive Alliance (UPA) government and Veerappa Moily as the then petroleum minister to transfer small and marginal oil fields under New Exploration Licensing Policy (NELP) bids, the UPA government however kept the decision in abeyance keeping in view the “sensitivity on the Assamese people and energy security”. 

The Centre has identified 67 small oil and gas fields across the country, including 12 from Assam, to put on auction from next month onwards through competitive global bidding. All these 67 fields were discovered some 20-30 years back and had been lying undeveloped with either the Oil India Limited (OIL) or Oil and Natural Gas Corporation Limited (ONGC). 

The move to auction these fields is aimed at monetising the vast resources lying untapped in these fields and partly meet the country’s energy demand. These fields altogether hold in-place oil and oil equivalent gas volumes of 86 MMT, which amounts to around Rs. 70,000 crore of reserves.

Union petroleum minister Dharmendra Pradhan said exploiting these small fields required micro-level management and specific technologies, making it unattractive for the two public sector oil giants to invest in. Hence, these fields had been lying unexploited over the years. The estimated capital expenditure required to fully exploit these fields would be around Rs 4,000 crore. 

“In case the government thinks that OIL and ONGC cannot operate these small fields profitably, some other public sector companies like GAIL India Limited, Indian Oil Corporation Limited (IOCL) and Hindustan Petrleum Corporation Limited (HPCL), who are new entrants in the exploration business may form joint venture companies with stake of state level public sector companies (PSUs) already formed by the Assam government like Assam Gas Company, Assam Hydrocarbon Limited etc.,” said Saikia. 

The Congress party said the Assam government must ask the Centre to reconsider its decision of the Centre to hand-over small oil fields to “private operators through NELP”. 

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