Oil blockade hits crude oil, natural gas production in Assam

December 24th, 2009 - 1:37 pm ICT by IANS  

Guwahati, Dec 24 (IANS) Crude oil and natural gas production by India’s premier oil exploration firm Oil and Natural Gas Corporation (ONGC) has been hit in Assam following a 96-hour oil blockade by an influential students’ group that entered its third day Thursday, officials said.
“There has been an overall impact with crude oil and natural gas production hit. The agitation would also have a long term impact on the production as a number of old oil wells might cease to function and would be hard to revive if work stops suddenly for few days,” ONGC spokesperson D.K. Das told IANS.

According to estimates, ONGC is incurring a loss of Rs.200 million daily due to the strike.

“The amount cannot be really quantified, but about Rs.200 million loss daily is being estimated,” the official said.

The influential All Assam Students’ Union (AASU) launched a 96-hour oil blockade from 6 a.m. Monday to protest the alleged move by ONGC to sell of its oil fields to private firms.

Student picketers during the past three days vandalized properties and vehicles belonging to the ONGC.

“There have been incidents of vehicles and other assets damaged which we have brought to the notice of the law enforcing agencies,” the ONGC official said.

The entire ONGC operations in Assam are in the eastern districts of Sivasagar and Jorhat.

The ONGC last week announced a Rs.24 billion investment plan for upgrading facilities and equipment to boost crude oil production in Assam.

The investment is part of the Rs.44 billion Assam Renewal Project involving comprehensive replacement and expansion of equipment and facilities, drilling of hi-tech wells and revamping of ageing drilling rigs.

Hyderabad-based Sairama Engineering Enterprises, Megha Engineering, in consortium with Russian company Volgo bagged the contract for the Assam Renewal Project.

The AASU and other pressure groups allege the ONGC was planning to sell off its assets by awarding contracts to private firms.

The ONGC denied there was any move to sell-off assets in Assam or privatizing its oil fields.

“Such stories of ONGC planning to sell off assets are totally unfounded,” A.K.Hazarika, director (onshore) of the ONGC, said.

The prime objective of the Assam Renewal project is to enhance operational efficiency besides revamping pipelines, modernizing existing equipment and installing facilities to boost production of crude at the company’s units at Lakwa, Lakhmani, Rudrasagar, Geleki and Moran in Sibsagar district in Assam.

ONGC also projected Assam’s oil production to double in the next couple of years from the current levels of 1.2 million metric tonnes annually from its nearly 40 oil fields in the state.

Assam has over 1.3 billion tonnes of crude oil and 156 billion cubic metres of natural gas reserves of which about an estimated 58 percent is yet to be explored. India produces about 30 million tonnes of crude oil annually, with Assam accounting for about five million tonnes of the total. Apart from ONGC, Oil India Ltd. (OIL) is the other major exploration firm operating in the northeastern state.

ONGC is India’s largest company by market capitalisation with oil and gas exploration and production operations throughout India and in Russia, Vietnam and Sudan among other countries.

But frequent strikes and protests in Assam has adversely impacted production of crude oil, besides incurring heavy financial losses for the oil giant.

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