An industry in troubled waters

An industry in troubled waters
SAMUDRA GUPTA KASHYAP

An oil company or a mini welfare state? SAMUDRA GUPTA KASHYAP reports on the curious predicament that oil majors face in Assam.

Assam’s oil industry is back in the news again after a long time, but the news isn’t good. The All Assam Students’ Union (AASU) has threatened to prevent drilling operations of the public sector Oil India Ltd (OIL) if the company failed to appoint 300 unskilled persons selected as per the latter’s ‘‘social commitment’’ package announced way back in 1997-98.

The agitation for appointing these 300 persons was launched in September last year, after OIL screened 9,000-odd candidates for unskilled categories of jobs and had then halted the process due to the Centre’s blanket ban on fresh appointments.

The students’ body has also submitted a list of candidates to the company, asking it to issue them appointment letters immediately or face an agitation. Recruitment of unskilled workers in Oil India Ltd were last conducted back in 1991. The All Assam Moran Students’ Union and Matak Students’ Union have also hopped on to the bandwagon on the issue.

The oil industry is a major industrial employer in Assam, with Oil India, ONGCL, Indian Oil Corporation, IOC (Assam Oil Division), Bongaigaon Refinery & Petro-chemicals Ltd and Numaligarh Refinery Ltd together providing direct jobs to over 25,000 persons, apart from creating indirect employment opportunities for more than one lakh people. It’s the favourite target for job-seekers, placing it above the Rs 3000-crore tea industry, where employment reached a saturation point decades ago.

But unemployment is already a major problem in Assam, with over 16 lakh unemployed youth on the state’s employment exchange live register. Thus, agitations, dharnas and demands for financial help have been woven into Oil India’s daily chores, often dragging it away from its primary task, that of exploration and extraction of oil and natural gas.

At the OIL head office at Duliajan, senior manager (PR) Prasanta Borkakati’s table is heaped with representations from different organisations. When the local student leaders have to attend a meeting at Guwahati they turn around and ask the company, ‘‘Where are the vehicles for us to travel?’’

The company is also expected to pitch in to sponsor events like the Asom Sahitya Sabha’s annual conference scheduled for February. And when a certain village was cut off for several weeks as the wooden bridge across a rivulet collapsed, a delegation landed at the company’s doorstep. They wanted to know how long it would take for Oil India’s engineers to make a survey and start constructing the bridge?

So, is OIL an oil exploration company or a mini welfare state? Spending a day or two at Duliajan, Oil India’s headquarters, one would grasp the extent to which people, the government and different organisations expect it to carry out its ‘‘social responsibilities’’. Between 1990 and 2000, the company spent roughly Rs 14 crore on construction, repair and improvement of roads in Dibrugarh and Tinsukia districts. The roads will actually be built and maintained by the state government’s Public Works Department (PWD). The company has also spent about Rs 10 crore on social welfare projects between 1997-2000.

‘‘As a public sector company, we are fully aware that we have to help the community around our installations. We have to fulfill that obligation to the best of our abilities, but the expectations are very high,’’ says PC Goswami, Group General Manager and Resident Chief Executive, Oil India Ltd. ‘‘Yet,’’ he adds, ‘‘we are expected to spend large amounts on making the roads traffic-worthy. Quite often we are told that since the roads are used mostly by Oil India’s heavy vehicles, hence it is our duty to maintain them. But to expect us to run a parallel welfare-oriented administration is too much,’’ he says.

Every time the government is approached for repairs of roads and bridges, it pleads helplessness, pointing to a perennial financial crunch. As a result, Oil India, which used to contribute 60 per cent of the total cost of a road as against 40 per cent by the state government till a few years ago, now fully funds the roads maintenance costs in and around Duliajan. According to one estimate, Oil India alone has built at least 400 medium and small bridges in upper Assam. Then there are ONGC, Indian Oil and others too.

With a turnover of around Rs 1850 crore and a net profit of over Rs 400 crore during 1999-2000, an expenditure of Rs 50 crore on ‘‘social responsibilities’’ is peanuts. But senior officials are worried about the future. Oil India, like most other PSUs, is currently operating under the administered prices mechanism (APM) and is thus protected against competition.

‘‘Just imagine what would happen two to three years later, when this protection would be gone?’’ wonders a senior official. ‘‘In the future, when the competition will increase, we may not be able to spare such large sums. That’s when the problems could begin,’’ the official said.

Various bandhs and blockades have already led to loss of crude oil production by about 18,500 tonnes during 1999-2000 for Oil India. At Rs 5,570 per tonne, it is a direct loss to the tune of about Rs 10 crore. And, such losses have been on the rise over the years.