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ONGC faces serious challenges in maintaining Assam output

New Delhi: Public sector upstream hydrocarbon major ONGC is facing serious challenges in maintaining production from its ageing oil fields in Assam in the face of frequent bandh by local outfits like All Assam Students Union (AASU) and All Tai Ahom Students Union (ATASU) over the company’s policy direction relating to business operations in the state, says a senior official of the company.


The AASU’s four day-long bandh that started on December 21 caused production from ONGC’s oilfields dip to 21,00 TPD from the normal level of 2,800 TPD. Production from ONGC’s Assam fields was restored to 2,730 TPD as on January 4. The company was facing difficulties in restoring disrupted production due to the wax formation in the wells.


About 85% of the company’s production in the state comes from three ageing fields—Rudrasagar, Lakwa Lakhamani and Gelekey—where production is declining. “Production maintenance from old wells is very challenging. Any disturbance like ‘bandh’ disrupts maintenance of these wells, affecting the production,” AK Hazarika, ONGC’s director for onshore operations, told FE.


Some of the wells where production was halted because of a similar bandh by another outfit, ATASU, in 2008, have since become permanently dry. Despite subsequent effort, production from these wells could not be revived.


The company is implementing improved oil recovery (IOR) projects with an investment of Rs 1,500 crore to improve production from these fields. The company started working on these projects toward end of 2001. But due to delay in implementation of IOR projects, results are not satisfactory.

ONGC has already invested about Rs 1,400 crore out of the Rs 1,500 crore of capital expenditure approved by the company’s board. “The company had targeted incremental production of 4.3 million tonne (mt) by March 2010. Against that, it had produced 2.1 mt by September 2009,” Hazarika said.


ONGC pays Rs 800 crore a year to the state government in royalty, cess and sales tax. So when production from ONGC’s Assam fields was disrupted, the state government also lost its revenue share. “It was a direct loss to the state government,” Hazarika said.


ONGC has been making losses from its Assam operations. To ensure better monitoring of the company’s operations in the state, the petroleum ministry has set separate performance targets for the company’s Assam assets in the memorandum of understanding signed for the current financial year 2009-10. The petroleum ministry has mooted the idea that ONGC should float a separate subsidiary... New Delhi: Public sector upstream hydrocarbon major ONGC is facing serious challenges in maintaining production from its ageing oil fields in Assam in the face of frequent bandh by local outfits like All Assam Students Union (AASU) and All Tai Ahom Students Union (ATASU) over the company’s policy direction relating to business operations in the state, says a senior official of the company.


The AASU’s four day-long bandh that started on December 21 caused production from ONGC’s oilfields dip to 21,00 TPD from the normal level of 2,800 TPD. Production from ONGC’s Assam fields was restored to 2,730 TPD as on January 4. The company was facing difficulties in restoring disrupted production due to the wax formation in the wells.


About 85% of the company’s production in the state comes from three ageing fields—Rudrasagar, Lakwa Lakhamani and Gelekey—where production is declining. “Production maintenance from old wells is very challenging. Any disturbance like ‘bandh’ disrupts maintenance of these wells, affecting the production,” AK Hazarika, ONGC’s director for onshore operations, told FE.


Some of the wells where production was halted because of a similar bandh by another outfit, ATASU, in 2008, have since become permanently dry. Despite subsequent effort, production from these wells could not be revived.


The company is implementing improved oil recovery (IOR) projects with an investment of Rs 1,500 crore to improve production from these fields. The company started working on these projects toward end of 2001. But due to delay in implementation of IOR projects, results are not satisfactory.

ONGC has already invested about Rs 1,400 crore out of the Rs 1,500 crore of capital expenditure approved by the company’s board. “The company had targeted incremental production of 4.3 million tonne (mt) by March 2010. Against that, it had produced 2.1 mt by September 2009,” Hazarika said.


ONGC pays Rs 800 crore a year to the state government in royalty, cess and sales tax. So when production from ONGC’s Assam fields was disrupted, the state government also lost its revenue share. “It was a direct loss to the state government,” Hazarika said.


ONGC has been making losses from its Assam operations. To ensure better monitoring of the company’s operations in the state, the petroleum ministry has set separate performance targets for the company’s Assam assets in the memorandum of understanding signed for the current financial year 2009-10. The petroleum ministry has mooted the idea that ONGC should float a separate subsidiary...