India eyes north-east oil and gas

By Subir Bhaumik
BBC News, Calcutta

India's state-owned Oil and Natural Gas Corporation (ONGC) is to invest nearly 90bn rupees ($2bn) in oil and gas projects in the country's north-east.

ONGC chairman RS Sharma made the announcement during a tour of the region on Tuesday.

He said the corporation would drill 140 oil wells in Assam and more than 80 in other states over the next five years.

Most oil wells in Assam are several decades old and ONGC wants to modernise as well as find new deposits, he said.

"We will involve top global companies like Halliburton to help us in the Assam renewal project. We want to reverse the trend of declining output from matured oil fields in Assam," said Mr Sharma.

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The ONGC, which produces about 1.6m tonnes of crude oil annually in Assam, hopes to nearly double its production with the additional investments.

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"We expect to produce about 3m tonnes of crude oil with the investments used in drilling wells and associated pipelines, besides revamping existing facilities," Mr Sharma told journalists in Assam's capital, Guwahati.

India produces about 30m tonnes of crude oil annually, with Assam accounting for about 5m tonnes of the total. Oil India Limited (OIL) produces about 3.5m tonnes of crude in Assam annually.

Assam has more than 1.3bn tonnes of proven crude oil and 156bn cubic metres of natural gas reserves, more than half of which are yet to be explored.

The state accounts for nearly 50% of the country's on-shore crude oil production.

"Assam has the highest success ratio in the world with 70% of the exploration sites yielding oil," said ONGC's director of exploration DK Pande.

The ONGC will also start exploration in Nagaland state by October this year after more than a decade. It was forced to stop operations in the mid-1990s after separatist rebels threatened to attack its facilities. The rebels are now negotiating with the Indian government.

The ONGC will also start drilling several wells in Mizoram state on the border with Burma this year. These blocks are said to be rich in both oil and gas.