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Oilfield auction as per policy framed in �92: Govt

By Staff Reporter

GUWAHATI, July 22 - The decision to hand over 12 small oilfields of the State to private companies through international open bidding is in

consonance with the New Exploration and Licensing Policy (NELP) started by the then Congress government at the Centre in 1992. And during the period from 1998 to 2012, a total of 21 oilfields of Assam have been auctioned.

Stating this at the Assembly today in reply to a call attention motion by legislators Ajanta Neog (Congress) and Ramendra Narayan Kalita (AGP), Commerce and Industries Minister Chandra Mohan Patowary said that in no way would the handing over of micro oilfields to private companies harm Assam�s interests; rather the State would gain a lot from the development in terms of enhanced oil production, additional revenue generation and creation of direct and indirect employment.

�This is not the first time that the State is witnessing international bidding for oilfield exploration as is being projected in a section of the media. Since the NELP came into force, 21 oilfields of Assam have gone through such international bidding and the latest auctioning of 12 oilfields is part of the bidding for 67 such oilfields across the country,� he said.

Dismissing apprehensions that the bidding would result in handing over of land rights to foreign private companies, Patowary said that they would only get permission to explore and extract oil for a period of three years and that unlike the earlier practice of reimbursement for exploration costs in the event of the drilling not yielding any oil, the companies would get nothing from the government.

�Exploring micro oilfields is a costly and risky exercise, as the exploration may not yield any oil at all. Moreover, according to experts, the 12 oilfields will necessitate drilling up to a depth of 6,000 metres. The resources of our PSUs are too meagre to take part in such exploration, and in any case, they are free to compete jointly with OIL and ONGC in the bidding process,� he added.

Patowary said that the recent auctioning of coalfields in the country enriched the government�s coffers by a whopping Rs 4 lakh crore, and that the oilfield auctioning would also benefit the country immensely.

Stating that Assam�s internal crude oil production was insufficient to run its four refineries even at their optimum level, Patowary said that unless production was boosted, they would always fall short of contributing to the State�s economy at the desired level.

�Now there is a plan to double the capacity of the refineries to 15 million tonne from the existing 7 million tonne, and Assam is contributing just 4.1 million tonne of the existing requirement. This makes for a strong case for increasing production. The gas cracker project, too, can be sustained only if we have more oil production,� he reasoned. The minister further said that the Assam Petrochemical Limited (APL) had been in the red for quite some time and that it might have to be closed down.

Earlier, raising the issue, Ajanta Neog said that the decision to auction the oilfields was not taken in the best interests of the State and apparently the decision was imposed on the State by the Centre. She said that there is reason to believe that vested interest circles, which do not want the oil PSUs to prosper, are behind the move. �The people of Assam are opposed to the auctioning of their oilfields to foreign private companies and want the move to be rescinded. The State government should pressurize the Centre to rescind the move,� she added. Ramendra Narayan Kalita demanded that there be an expert committee to decide the merits and demerits of the oilfield auctioning.

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