Oil India puts PEC plans on hold until elections

Vol 22, PW 8 (07 Feb 19) People & Policy

Oil India's hopes of increasing output are fast disappearing following a decision to put on hold plans to offer Production Enhancement Contracts (PECs) for its JORAJAN and TENGAKHAT fields until after general elections, expected between April and May 2019.

Escalating violence in Assam over the contentious Citizenship (Amendment) Bill, 2016 is a contributing factor in Oil India's decision not to further antagonise company unions who mistakenly oppose PECs as a backdoor attempt to privatise Oil India. From Duliajan, an Oil India source confirms the PEC tender pre-bid has been deferred indefinitely after Oil & Gas Employees Union officials boycotted a meeting on January 24 with company directors Biswajit Roy (HR), Pramod Kumar Sharma (operations) and P Chandrasekaran (exploration).

All three flew from Delhi to Duliajan to attend the scheduled meeting but union leaders failed to show up. During an earlier January 11 meeting in Delhi, attended by chairman Utpal Bora, union leaders warned of mass protests if the fields were offered to any of three shortlisted bidders: Halliburton, Baker Hughes or Schlumberger.

Oil India directors had set out to explain to unions that PEC contracts are designed only to increase production over a baseline for a fee and involve no transfer of ownership. Last year (2017-18) Oil India production plateaued at 3.4m tonnes of oil and gas equivalent or 9.5% of the country's total 35.7m tonnes production, according to the oil ministry's Petroleum Planning and Analysis Cell.