ONGC: No Plans to Sell Assam Assets

Oil and Natural Gas Corp. Limited

In response to media reports claiming that Oil and Natural Gas Corporation Ltd. (ONGC) plans to sell all of its oil fields in the country's Assam state to Oil India Ltd. (OIL), Assam, ONGC has issued the following statement:

"We want to clarify to all concerned that the above-referred news is incorrect and ONGC has no plans to part with its Oil and Gas Assets in Assam with any organization. In fact, ONGC is going ahead with a major investment plan to revamp its production facilities in Assam, to drill many high-tech wells to step up the production from its aging fields in Assam from the current level of 1.4 million Metric Tonnes (MMT) per year to 2.5 MMT in the next 3 to 4 years. No company would plan such sizeable investment unless it has a long-term interest in this Asset.

"This mega investment under the 'Assam Renewal Project' includes repair, revamp of all old installations which are ageing, replacement of old and unsafe pipelines, drilling of large nos. of high-tech wells, revamping and upgradation of drilling and work-over rigs of this Asset etc.

"ONGC has a well-developed infrastructure of surface facilities in Assam. However, as most of these were built around forty years ago, they require replacement to function with best-in-class efficiency, as is the norm of ONGC elsewhere. Majority of investment plan of the Renewal Project will go to modernize these surface infrastructure/facilities.

"The oil production of ONGC from the northeastern state of Assam peaked to 3.03 million tones in the year 1989-90. Thereafter, production went downhill, due to aging of fields and obsolescence of equipment and facilities.

"The action plan firmed up under the 'Assam Renewal Project' includes – comprehensive replacement and revamping of aging installations, removal of surface bottlenecking and utilization of state-of-art technologies and equipment of international standards. Also plan to drill many high-tech wells to increase production from each well.

"The tender of this 'Assam Renewal Project' has already been floated and 11 globally-reputed bidders have participated in the tender.

"On implementation of the 'Assam Renewal Project,' not only the decline of production of oil and gas of the Asset will be arrested but also significant improvement is expected in the production of crude oil and gas along with efficient functioning of the Asset. Therefore, news published in certain section of the media are baseless and devoid of facts but propagated by some vested interest for creating confusion among stakeholders."