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The Assam government has defended the Centre’s decision to auction 12 oilfields in the state,
amid stiff opposition from All Assam Students Union (AASU).
But oil industry sources and analysts doubt whether any major global company would come for the global bidding of the micro and mini oilfields in Assam.
The powerful AASU, which once was led by CM Sonowal, has however opposed what it describes as ‘privatisation of Assam’s oil resources’.
State Industries and Commerce Minister Chandra Mohan Patowary told LOOKEAST that the attempted auction of 12 micro and mini oilfields would attract at least investment worth Rs 5,000 crore.
“That would boost Assam’s financial condition as the royalty and taxes to be received once the companies start extracting oil from those fields.”
Patowary said that these to-be-auctioned oilfields have not been used for more than two decades.
“The bidding companies would only get the right to extract oil from the fields and the land rights would not be changed.”
He said that the new exploration licensing policy introduced in the year 1997-98 has been followed by regular auctioning of oilfields in different parts of the country.
AASU said that the Centre should either entrust OIL or ONGC or the Assam Government with the job of exploration of oil in those 12 oilfields
The Modi government recently decided to liberalize the licensing policy further.
As a result, 67 oilfields of the country, including 12 from the State (Assam), have been put up for auction next month.
Patowary said that different Assam-based business entities , like Numaligarh Refinery Ltd, Assam Gas Company, Assam Hydro Carbon and Energy Company, etc., would also be participating in the bidding process.
“The amount of crude oil produced in the State presently is not adequate even to meet the requirement of the Assam-based refineries. A decision has already been taken on principle to increase the capacity of the Numaligarh Refinery and under the circumstances, bidding of the oilfields of the State is required so that Assam’s oil output can be raised.
“Or else, the government would be forced to import crude to meet the requirement of the refineries of the State and the cost of production would go up substantially.”
Meanwhile, oil industry sources doubted whether major oil exploration companies would show interest in bidding for the micro and mini fields of the State which are lying idle for years. Sources said that Oil India Limited and ONGC engage private sector companies have expertise in exploration, but may be deterred by ‘ground realities’ to invest in the auction.
“Many globally-recognised companies now think twice before coming to Assam,” said one top oil market analyst based in Guwahati but was unwilling to be named.
So it is doubtful whether any major company will show interest in going for substantial investments in the State by bidding for old and unused fields.
Meanwhile, the All Assam Students’ Union (AASU) today said that under no circumstances would it allow privatisation of oil resources of Assam and it was also the consensus decision of the State’s people.
In a statement, the AASU said that the Centre should either entrust OIL or ONGC or the Assam Government with the job of exploration of oil in those 12 oilfields. “Assam’s interests would be best served by continuing with State ownership of its natural resources, such as oil, gas, water and other minerals,” it said.
This and the issue of granting Hindu refugees are two emotive issues that pits CM Sonowal and his former AASU comrades at loggerheads.