The Upper Assam oil town of Duliajan – the headquarters of Oil India Limited, the country’s second largest state-owned hydrocarbon exploration and production company – is in turmoil. Over the last week or so, the town has been roiled by protests by the oil company’s employees that have threatened to turn violent on at least one occasion. The workers, backed by Assamese nationalist groups, accuse the Central government of attempting to “privatise” two of Oil India Limited’s high-yielding oil fields.
The company has denied the privatisation allegations, but this has not dissuaded the protestors.
“If the government and the management do not retract their decision, we will halt all oil activities,” said Durlov Dutta, the general secretary of the workers’ union. “And if that happens, the whole of Upper Assam will come to a standstill.”
‘Production enhancement’
The crisis started when the company announced plans to rope in private players to increase production in the two oil fields – Jorajan and Tengakhat. Earlier this month, it invited tenders from eligible companies.
Oil India Limited authorities, however, insist tenders have been sought only for a “production enhancement contract” for 15 years. They claim this does not amount to privatisation as ownership of the fields will remain with Oil India Limited. “As per the Hydrocarbon Vision 2030 for North-East, the government wants the oil companies to augment our production,” said Oil India Limited’s spokesperson Tridiv Hazarika. “But we are dealing with ageing fields, so the government suggested that we look at production enhancement contracts with private companies. So, we have picked two fields where production has gone down and there are little chances for us to make any visible improvements.”
The Hydrocarbon Vision 2030 for North-East outlines steps to leverage the hydrocarbon sector for development of the region.
According to the bidding documents, which Scroll.in has seen, both the Jorajan and Tengakhat oil fields have witnessed a gradual decline in production over the years.
Workers’ fears
But the union is not convinced. “These two fields are at the centre of Oil India’s operation,” said Dutta. “The company earns a bulk of its revenues from these two fields. If these two fields are given away to private players for 15 years, there will be nothing like Oil India Limited left. The government’s intention is to kill the PSU [public sector undertaking] that Oil India is. A public-sector company cannot just be about making profits.”
There is also apprehension that jobs will be lost if private players come into the picture. “These two fields engage at least 500 permanent employees and nearly 15,000 people including daily-wage labourers and casual workers,” said Dutta. “A lot of people will be compelled to take up VRS [voluntary retirement schemes].”
Besides, the protesting groups claim the companies invited to place bids were engaged by Oil India Limited as external experts in the past too but failed to ramp up production significantly then. “Their services were hired in the past too by Oil India, but they could not produce any results,” said Satyakam Borthakur, a professor at Dibrugarh University. “How come the government thinks they will deliver now? This is almost akin to a corporate scam.”
Hazarika argued that that it was unfair to conclude that the companies’ services did not help Oil India Limited. “Whatever we are producing now is to a large extent because of the technological inputs and expertise we received from them,” he said. Besides, he pointed out that the private companies would make profits only on the excess oil they manage to produce.
Profit-driven companies?
However, herein lies another point of contention. Critics of Oil India Limited’s proposed move are concerned that the private companies will produce more than what is required to meet the targets of the Hydrocarbon Vision 2030 for North-East. “Private companies would want to maximise their profits,” said Ajayananda Borthakur, who retired as chief geologist at Oil India Limited. “They will drain out all the hydrocarbons that should actually last for the next 50 years or so.”
DK Pande, former director (exploitation) at the Oil and Natural Gas Corporation of India, agreed that engaging private companies may adversely affect the “health of the reservoir” as they tend to “suck [oil] fields dry”. He said, “You have to be calculative about it and as public companies we have always taken that approach.”
Hazarika, however, said there would be enough safeguards to avoid such a situation. “The government has ensured to us that we will have a say in how much production will take place,” he said.
Ritesh Gupta, an energy analyst, backed the government’s plan. “Oil production has gone down consistently in the last two years, so the government clearly has reason to be worried,” he said. “In fact, this should have happened before. If India can produce more, why not? And to be honest, both OIL and ONGC [Oil and Natural Gas Corporation] have been very inefficient companies.”
Oil and sub-nationalism
However, the resistance in Assam against the entry of private companies in the state’s oil fields goes beyond job loss and crony capitalism concerns. The protests have a strong subtext of sub-nationalism as is evident from the active participation of several Assamese groups. Farm leader Akhil Gogoi has threatened to “launch a resistance movement to save the oilfields of Assam”. The state’s powerful student groups, the All Assam Students’ Union and Assam Jatiyatabadi Yuba Chhatra Parishad, have also thrown their weight behind the protests and warned of blockades if the government goes ahead with its plans.
Oil has always been at the heart of sub-national politics in Assam. The anti-foreigner Assam Movement in the 1980s dovetailed with an economic blockade: agitators cut off pipelines that transported oil from Assam to refineries outside the region. In 2016, when the Central government privatised 67 small oil fields, including 12 in Assam, the state saw intense protests led by ethnocentric organisations invoking the same sentiment. At that time, a slogan that was widely heard was also a potent war cry during the Assam Movement: “Tez dim, tel nidiu”. We will shed our blood, but not share our oil.