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Auctioning our Oil Fields

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  2 July 2016 12:00 AM GMT

For quite some time now, Assam has had 12 small oil fields that the Centre does not know what to do about. Regardless of the fact that Assam contributes only about 10 per cent of India’s crude oil production, Assam has the oldest oil refinery in India set up more than a hundred years ago. A whole lot of Assamese engineers specializing in petroleum technology have been able to provide leadership not only in the State but in the rest of the country and other parts of the world. So far, there has been no problem with the larger oil fields in the State that have been maged by major oil companies like Oil India Ltd and the Oil and tural Gas Commission Limited that have operated in the State for decades. Perhaps the only wasteful activity in the State related to the industry was the flaring of the associated tural gas that went on for decades. The extent of this crimil waste was something like Rs 38 lakh to Rs 42 lakh per day for a couple of decades. This is what the failure to plan in advance can do to the tural resources of a State. Now there are 12 small oilfields in Assam that the Centre does not know what to do about. So it proposes to auction them. This is unfortute because an auction of these small oilfields will put them in the hands of private companies from outside that have no concern whatsoever for the economy of the State. The Centre is aware that there are no indigenous private parties capable of bidding for the smaller oil fields, and, therefore, decides that these oil fields must go to private parties from the mainland that have no commitment to the future of Assam. This is not the kind of situation that anyone in Assam can be expected to accept. However, the Centre does not seem to have lost any sleep over what the people of Assam are willing to accept and what they are not willing to accept. In a recent letter to Assam Chief Minister Sarbanda Sonowal, Leader of the Opposition Debabrata Saikia of the Congress said, “The tiol Exploration and Licensing Policy was formulated in 1997 under the BJP-led government, under which it was proposed to hand over 12 oilfields in Assam to private companies. Though the draft policy was formulated to transfer the small and medium oilfields under the policy under the UPA government, it was decided not to hand over the oilfields in Assam, keeping in mind the sensitivity of the Assamese people.” It will be recalled that as president of the All Assam Students Union in 1991, Sarbanda Sonowal had himself publicly demanded that the issue of exploration and development of oilfields should be transferred from the Union List of the Constitution to the State List. This stand was very much in consonce with the AASU’s stand of the Assam movement days when it strongly opposed the Centre’s intention of taking away crude oil of Assam for the Barauni refinery. Unfortutely, the AASU could not prevent this from happening, and so instead of setting up a good medium-sized oil refinery in Assam at that time, Assam’s crude oil was taken away for the Barauni refinery. This irratiol political decision (where an economic decision was called for) did considerable harm to Assam’s economic interests. There is no justification for repeating acts of economic injustice to Assam on one pretext or the other.

Now that we have Assam Hydrocarbon and Energy Company Limited (specifically constituted for the purpose of looking after the margilized oilfields), these 12 oilfields should be handed over to the Company if the Centre is uble to persuade either Oil India Limited or the ONGCL to take over these margil oilfields also. One does not wish to see yet another ratiol economic initiative of the government being scuttled by a political decision that runs counter to the interests of the State. This is perhaps also the time for all Indian States to have second thoughts on whether all tural resources of the country that are below the ground should be automatically deemed to belong to the Centre. This militates against the federal principle enshrined in our Constitution. Most people would agree that a fairer dispensation would be for the States to own such tural resources.

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