NEW DELHI, March 27 ? In an encouraging development, Oil and Natural Gas Corporation (ONGC) is likely to re-start its Nagaland operations shortly, even as the two oil companies including Oil India Limited (OIL) has attributed breakdown in law and order situation and poor infrastructure facilities in the region as among the main factors for a sharp decline in crude oil production in the region. Its truce time in Nagaland an so taking advantage of it, the Union Petroleum and Natural Gas Ministry has hammered out an agreement with the Nagaland Government to resume operations in the State, under suspension since May 1994.
The Ministry has informed the Parliamentary Standing Committee on Petroleum and Chemicals that following continuous dialogue between Nagaland Government and Central Government, the issue has been resolved and operations are expected to commence shortly. ONGC has had established an oil reserve of 2.69 MMT in Nagaland before its operations in the State had to suspended in the wake of the underground militant outfits including the NSCN slapping extortion notices. It also picked up trouble with the Nagaland Government, which directed ONGC, to stop operations in the State. However, the Petroleum Ministry has mentioned that though the problem with Nagaland Government has been resolved, the issue of territorial dispute between Nagaland and Assam is yet to be resolved.
Meanwhile, the two oil companies operating in the North-East have held that constraints in operating conditions including bandhs, barricades, strikes, incidence of thefts and sabotage in the North Eastern region, are among other reasons for production shortfall. ?These factors have not only affected the production but also affected the drilling, construction and developmental activities,? the Committee was told. The OIL for instance has submitted before the Parliamentary Committee that infrastructure constraints leading to production curtailment caused by land acquisition problem, closure of flow lines, valves by miscreants, extremely bad road conditions in and around the oilfield areas including National Highway-37 and the State PWD road affected movement of men, equipment and material.
The indirect effect of closure of wells is also tremendous, OIL submitted, pointing out that it take very long time to retrieve the original production potential after closure and at times the wells die down completely. The production of crude oil countrywide has been declining and according to figures made available production in 1999-2000 at 31.94 MMT has decreased from 1998-1999 production figure of 33.64 MMT. The ONGC and OIL, which were both given a target of 25.8 MMT and 3.30 MMT, respectively, managed to achieve a production level of 24.64 MMT and 3.28 MMT, respectively during the period 1999-2000. The two oil companies suffer the same kind of problems in the North-East, including acute power shortages in the States, and depletion of production due to ageing of fields. The ONGC has claimed to have mounted very aggressive programme for enhancing the oil recoveries. Over the next three to five years this will show results, the Committee was informed. The Company claimed to have introduced some of the cutting edge technologies. For instance in Silchar, where the fields are very old the ONGC revealed that it has been following microbial enhancement of recovery and wells which were producing one tonne a day were now producing three tonnes a day.
To offset the problem of power shortage, ONGC has decided to install a captive generating gensets in addition to additional feed up from the State Electricity Boards so that power availability does not affect production. On the other hand, the OIL has reported that oil fields in Assam have yielded over 30 per cent of its in-place reserves and is at the ultimate state of depletion. Arresting decline, sustenance of production through various efforts both at the well level and reservoir level are being tried, it claimed. The shortfall in crude oil production in the region has left Assam?s four refineries high and dry, with Bongaigaon Refinery, and Petrochemicals Limited (BRPL) facing closure. The crude production in Assam, for instance, has stagnated at 5 million MT, as against a ninth five year plan target of 10 MMT. The shortfall of Assam crude oil to BRPL became acute after commissioning of Numaligarh Refinery Limited (NRL) further reducing the profit margin of BRPL. The shortfall in crude production estimated to be in the region of 2 MMT forced the BRPL to switch to imported crude pumped from Haldia to Bongaigaon, which to proved uneconomical as it titled the economy of balance.