Vol. XL No. 31 July 31, 2016

Left Democratic Manch Opposes Privatisation of Assam’s Oilfields

THE Left Democratic Manch in Assam, a joint platform of 11 parties, including CPI(M), CPI, CPI(ML) and Forward Bloc, has written to the Prime Minister opposing the central government’s move to privatise 12 oilfields in the state. They said the move will pave the way for loot and plunder of natural resources by big private companies and corporate sectors and demanded that the Centre immediately withdraw its decision which goes against the larger interest of Assam and its people.

In a letter on July 14, the Manch said, “You are well aware that the central government has come out with a proposal, grandiosely titled Hydrocarbon Vision North-East-2030. What is, however, highly objectionable is the fact that the government of India has decided to privatise and hand over 12 oilfields of Assam to private players through bidding to achieve the dream of a 'hydrocarbon hub' in the region. Already the Ministry of Petroleum and Natural Gas has organised interactive sessions to showcase the potential of the oilfields being offered as part of the Discovered Small Fields Bid Round - 2016.”

Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), Oil India Ltd. (OIL) are among the country's most profitable public sector undertakings (PSUs). The decision to auction oil and gas fields of state-owned oil giants like ONGC and OIL to private firms on a new revenue sharing model will give pricing and marketing freedom to the private bidders. The new model will ensure that there is least government interference in the operations. Auctioning oilfields with such attractive incentives to the private companies is not acceptable. The acrid logic behind the decision of the government for global bidding that these fields left idle by ONGC and Oil India are “not economically viable” is flawed, unsound and untenable.

“We have reasons to believe, a nexus between a section of the top officials of the state-owned oil giants (ONGC and OIL) and certain private companies has been hatching conspiracy and unleashing misinformation campaigns for transfer of Assam's oilfields to the hands of the private players. On earlier occasions too, a section of high ranking officers of ONGC has earned notoriety for misrepresentation of facts only to achieve their narrow personal gains,” the Manch said.

ONGC and OIL have the necessary infrastructure for crude oil storage, handling and processing near these oilfields. In fact, the PSUs have spent crores of rupees for discovery and development of the fields. Now the PSUs in the oil sector must not be sidelined in favour of private players.

It may be noted, the government had to cancel award of Ratna and R-Series oilfields to Essar Oil and Amguri oilfield in Assam to Canada's Canaro Resources and revert them back to state-run ONGC. In Assam, the award of Amguri field to Canaro was terminated following the Canadian firm selling its controlling stake without the government’s consent. Now the Cabinet Committee on Economic Affairs (CCEA) has decided that the Amguri field be reverted to original licence holder, ONGC. As media reports suggest, Kolkata-based Assam Company India Ltd. (ACIL) has entered into an agreement with ONGC to help restart operations at Amguri field. It may be noted the Centre had issued termination notice to Canaro on June 1, 2010, citing "national interests and government’s sovereign power on the national resources."

While the Centre is empowered to regulate and develop oilfields, the state is the actual owner of the land and natural resources. History testifies that since its annexation by the British, the natural resources of Assam and the North-east have been subjected to exploitation. Successive central governments, since independence, had merely continued the tradition of exploitation and discrimination. Now, under the guise of making the North-east a 'petroleum hub' for the neighbouring countries, the NDA government is planning to exploit whatever remains of our fossil fuel resources. The rapacity of private players in the oil sector has been experienced by many parts of the world and the North-east is slated to become yet another victim. There is, indeed, something ominous about the Certre's exploitative game-plan and myopic vision.

Companies that win the auction will also be allowed to explore the area, which could lead to bigger discoveries because the presence of commercial quantities of hydrocarbons has already been established. Also the uniform licencing policy will allow operators to explore all forms of oil and gas resources, including unconventional natural gas like coal-bed methane, shale gas and oil, tight gas and gas hydrates. The new policy gives greater autonomy to private players on issues related to pricing and marketing. As a result, even the companies that are not in the oil and gas sector are interested for bidding. Acquiring a discovered field is a low-risk business and there can be windfall profit once these fields are developed.

On many a occasion, the Centre had promised huge public investment to reverse the declining trend in oil and gas output and to enhance crude oil production in Assam. The government also promised inflow of money for exploration and exploitation of new oilfields and expansion of the existing capacities of the state's refineries through the PSUs. But to our utter dismay, the NDA government has now belied the hopes and aspirations of the people of Assam and decided to auction the oilfields discovered and developed by ONGC and OIL. At a time when the existing refineries in Assam are on the brink of closure following shortage of crude oil, the new policy fails to provide any effective solution, especially when a particular operator had the freedom to transport the crude oil to any part of the country, it said.

In the run up to the 2014 Lok Sabha election, the NDA leadership had promised to protect the land and resources of the people of Assam and also speedy development of the region. During the recently held Assembly election in Assam too, central ministers and leaders of the ruling BJP promised a lot. However, the hopes and aspirations of the people of Assam have been shattered due to the anti-Assam and anti-people policies of the Centre as well as the state government. Although oil is a low employment generating industry, the oil and natural gas sector has significant contribution in Assam's economy. Large number of youths are either employed by or engaged in OIL and ONGC for their livelihood. Now the atmosphere is filled with genuine apprehension that large number of workers and employees of the PSUs will lose their jobs and the private companies will exploit the workers with the policy of hire and fire.

“Now Assam is again in the throes of agitation over privatisation of oilfields. Apart from  the political parties, various student-youth organisations, trade unions etc. are on the streets against privatisation of Assam's natural resources. Even the ally of the ruling BJP in Assam, the Asom Gana Parishad (AGP), has publicly expressed its opposition to privatisation of Assam's oilfields. Now the state has been witnessing mounting protest against the Centre's decision. Massive protests are being organised across the state with huge participation of cross section of the people. It is the considered opinion of the 11 Left and democratic parties that privatisation will cripple the oil sector and is harmful to the interest of Assam and its people. We, therefore, urge upon you to reconsider the decision with all seriousness at your command. We demand of the central government to immediately retrace its step and withdraw the decision to privatise the state's oilfields,” the Manch said.

The Left Democratic Manch is a united platform of CPI(M), CPI, CPI(ML), Asom Songrami Mancha, Nationalist Congress Party, Samajwadi Party, Janata Dal-S, Aam Aadmi Party, All India Forward Bloc, Liberal Democratic Party and RCPI.