Oil Bonanza for Assam after BJP win

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SAMIR KAR PURKAYASTHA 

The BJP victory in Assam has made the party’s government in Centre happy and that is showing in its decision to shower investments in the state’s oil sector. The Centre will also support the state’s bid for a higher royalty to augment state finances.

Public sector oil firms will invest Rs 6,000 crore in Assam during the current fiscal as part of the Hydrocarbon Vision Plan 2030, Petroleum Minister Dharmendra Pradhan has said.

“This amount will be invested for implementing various plans, including capacity expansion, terminals, new pipelines, marketing and other activities. We have already started the work in this regard,” Pradhan said in Guwahati this week.

Indian Petroleum Minister Dharmendra Pradhan

Indian Petroleum Minister Dharmendra Pradhan

Pradhan said that as part of the Hydrocarbon Vision 2030 for North East, announced in February, Rs 1,30,000 crore will be invested in the region. Out of this, Rs 80,000 crore will be spent in Assam, he added.

Pradhan said the Government has drawn up a plan to augment the refining capacity of the four refineries located in Assam – Digboi, Guwahati, Bongaigaon and Numaligarh. “The four refineries have a combined installed capacity of 7 MMTPA. Our target is to expand the refining capacity of the region to 16 MMTPA,” he added.

He added that the Hydrocarbon Vision document seeks to turn the northeastern region into a hub for hydrocarbons by developing crude import infrastructure and promoting trade between the region and neighbouring countries, like Bangladesh, Nepal, Bhutan and the Southeast Asian nations.

As part of its plans to develop the hydrocarbon sector in the State, the Centre will put 12 small oilfields of Assam under auction, along with 55 other fields in the rest of the country.

 “All these 67 oilfields are with Oil India and ONGC. As these are small oilfields, they were not so financially viable. Now we are looking to auction them,” Pradhan said.

Numaligarh Refinery

Numaligarh Refinery

A road-show was held in Guwahati to attract bidders for the 12 blocks located in Assam. The auction process for the small fields will begin on July 15.

Pradhan said plans are afoot to increase the consumption of liquefied petroleum products and to increase the per capita consumption of power in Assam.

The minister said that per capita consumption of liquid petroleum product in Assam is 62 kg as against the national average of 138 kg, while the same in respect to electricity consumption stands at 254 KW as compared to 1,000 KW in entire India.

He said that the Numaligarh Refinery has started sending oil through pipeline to Bangladesh. The refinery will also start producing bamboo-based ethanol by 2017-18.

The minister said that a 5,000-km additional network of pipelines would be laid in the North East to boost production and distribution of crude, products, LPG and natural gas.

Pradhan said that imported crude from Nigeria will be brought to cater to the increase in the production capacity of the oil refineries in Assam.

In this regard, he said that the Centre has requested the State Government to waive entry tax on imported crude with a view to increasing the volume of imported crude oil. The Central Government will also support Assam’s stand on the oil royalty issue.

“We have resolved to support Assam and to proceed in the matter legally. The Central Government will definitely help Assam and we will ask the oil companies to pay after the legal procedure concludes,” Dharmendra Pradhan said.

He said that Rs 1,450 crore is due to Assam from Oil India and ONGC from 2014, after Supreme Court gave an interim relief to Gujarat.

Hydrocarbon Vision document seeks to turn the northeastern region into a hub for hydrocarbons by developing crude import infrastructure and promoting trade between the region and neighbouring countries, like Bangladesh, Nepal, Bhutan and the Southeast Asian nations

Pradhan said that although the Supreme Court is yet to decide on the oil royalty since 2008, it has asked the oil firms to pay the royalty from 2014 till date to Gujarat.

The Minister said the Centre has already asked the oil firms to pay the amount after the legal procedure is completed.

He criticized the former UPA regime in Centre and the previous Congress government in Assam on the issue.

Pradhan said that though Manmohan Singh being elected to the Rajya Sabha from Assam, the State remained deprived of its dues and added that former Chief Minister Tarun Gogoi had filed a petition and then “just wasted two years”.

It is noteworthy that the State Government has filed a petition in the Gauhati High Court in 2014 on the royalty issue.

The Tarun Gogoi-led Government had claimed that following the change in the royalty regime in 2008, the State has suffered a cumulative loss of revenue of more than Rs 10,000 crore.

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