Assam government sets up oil and gas exploration company

Jun 3, 2006, 12:52 GMT

Guwahati, June 3 (IANS) Assam Saturday announced the setting up of an exploration company to hunt for crude oil and natural gas reserves in this oil-rich region.

'The idea behind setting up the Assam hydrocarbon exploration and development company is to augment oil and gas production which in turn would bring in more revenue and generate employment in the region,' Assam Industry and Commerce Minister Pradyut Bordoloi told journalists here.

The Oil India Limited (OIL) and the Oil and Natural Gas Corporation (ONGC), two of India's premier exploration firms, have been engaged in production of crude oil and natural gas in Assam since the past four decades.

Bordoloi said the government was keen to allow private investors to have commercial stake in the state-owned company.

'We are now looking for technically competent experts and other resource persons to get this landmark project going,' the minister said.

'Detailed modalities and how we are going to manage and run the company are being worked out by a team of experts,' he added.

India produces about 30 million tonnes of crude oil annually, with Assam accounting for about five million tonnes.

OIL produces about 3.5 million tonnes of crude in the state annually.

Assam has over 1.3 billion tonnes of proven crude oil and 156 billion cubic metres of natural gas reserves of which an estimated 58 percent of hydrocarbon reserves are yet to be explored.

The state produces about five million cubic metres of natural gas annually.

'There are some 2,000 wells in that have stopped producing oil. But experts are of the opinion that these aging wells have the potential to yield oil and we could perhaps revive such non-functional sites,' the minister said.

'Assam occupies an important position in the history of oil industry in India and the state accounts for nearly 50 percent of the country's on-shore crude oil production,' Bordoloi said.

'Assam has the highest success ratio in the world with 70 percent of the exploration sites yielding oil and we are sure our new company would be able to exploit the situation to find new oil and gas reserves,' the minister said.

The state is home to the world's oldest operating oil refinery, the Digboi Refinery, established in 1901.

© 2006 Indo-Asian News Service