OIL ON TAP

The year 1825. Assam is still not a part of (British) India. The Ahoms—Mongoloid people with their roots in Thailand and rulers of Upper Assam since about 1228—are facing a serious crisis arising out of repeated Burmese incursions. The king is compelled to request the British for help in ousting the invaders. The task is accomplished within months. But Assam passes into the hands of the British with the signing of the Treaty of Yandaboo with the Burmese on February 24, 1826.
Lieutenant R Wilcox of the 46th Regiment Native Infantry, engaged in pushing out the Burmese, is also entrusted, along with a survey party, to lead a military reconnaissance mission in the extreme eastern part of the Brahmaputra Valley. Marching through thick rain forests full of deadly leeches and numerous other wild animals, Wilcox arrives at the upper reaches of the Namchik river, where he suddenly sees “rising to the surface at Supkhong, great bubbles of gas and green petroleum”.
That serendipitous sighting of oil is today in the news with Oil India Limited, an oil and gas company that has gone through corporate twists and turns, preparing to raise funds from the primary market with a public issue.
“We have already filed the Draft Red Herring prospectus with market regulator SEBI for our initial public offering,” says Oil India Chairman and Managing Director M R Pasrija, pointing out that it has already signed an MoU with Hindustan Petroleum, Mittal Investments and GAIL for setting up a 15-MTPA grassroots refinery and petrochemical complex at Visakhapatnam. Oil India will offer 2,64,49,982 equity shares of Rs 10 each for cash at a price to be decided through a book-building process.
“Oil India already has 26 per cent stake in the Numaligarh Refinery in Assam, while we also have committed 10 per cent share in the mega gas cracker project that is coming up near Dibrugarh,” Pasrija recalled. With Numaligarh’s product pipeline to Siliguri already commissioned, Oil India is currently on the way to complete a gas pipeline from Naharkatiya to Numaligarh, a joint project with NRL and Assam Gas Company Ltd.

It is a long story from Namchik river to the bourses for what was a distinct Assam “boxwallah” company. Two years after Wilcox saw the oily sheen on the waters, an English trader called Robert Bruce (who had accompanied Maniram Dutta Barua—later Maniram Dewan—in 1823 in having the first cup of Assamese tea as a guest of Beesa Gam, a Singpho chief near present-day Margherita), who, in 1828, wrote about coming across “many oil seepages upstream of Makum for a distance of about five miles.”
Almost 40 years later, in 1865, HB Medlicott of the Geological Survey of India, touring the coalfields of Upper Assam, came across some oil seepages that prompted him to recommend trial boring in the area. “The springs (petroleum) of the Makoom river are by far the most abundant… The locality… exhales olefiant gases… the discharge of gas is so copious and continuous that when lighted, it flames almost without intermission… the abundance of gas suggesting that the reservoir of liquid (if such there by) has not been tapped…” he reported.
In less than a year, one Mr Goodenough of McKillop, Stewart & Co obtained permission and started boring the first well at Nahorpung near Jeypore. It was bored by hand, but was abandoned when it turned out to be dry at 102 ft. On March 26, 1867, he struck oil at 118 ft, thus marking the beginning of the oil hunt in Assam, hardly seven years after Colonel William Drake completed his first well in Pennsylvania, US.
The output of oil in Assam was not something to write home about. Until 1882. It was in that year that the Assam Railway & Trading (ART) Company was floated by Dr John Berry White, who was also the pioneer of medical education in Assam. ART Company applied for a licence in March 1888 to extract petroleum at a place that later came to be known as Digboi.
On October 19, 1889, oil was struck at Digboi at a depth of 178 ft. That historic site stands today proudly as Well No 1 in the heart of Digboi as a museum piece. Also placed at the entrance of the over 100-years-old Digboi refinery is the bottom portion of one of the huge cast iron pans—‘stills’ as they are called—used to treat crude oil in a small refinery—India’s first—that was initially set up at Margherita in 1893.
As activities expanded, the directors of ART Company, which dealt with many things including tea, coal, railways, plywood and brickfields, concluded that profitable development of the oilfields could be best secured only by a separate organisation. Thus, in 1899, the Assam Railways & Trading Company promoted another company, the Assam Oil Company, with its headquarters at Digboi. Lord Ribblesdale, chairman of ART Company, became the first chairman of Assam Oil Company.
The ART Company however did not immediately relinquish its interest in oil and took a large number of shares in the new company, while the Boards of the two companies remained intimately connected. This continued for about 20 years, until January 1921, when ART’s shares were sold and the UK’s Burmah Oil Company (BOC) was appointed commercial and technical managers of AOC. Another smaller entity called the Assam Oil Syndicate too was merged with it to bring oil operations under one single umbrella.

Soon after began the construction of India’s first refinery, the Digboi refinery. It was commissioned in 1901 with the 1893 Margherita unit getting merged into it. The refinery initially had a capacity of just 500 barrels a day and produced only kerosene, wax oil for lubrication, fuel oil and greases. While the refinery initially did not proved to be cost-effective with only 380 barrels of crude oil coming in from 100-odd wells in the area, Burmah Oil Company, with proven experience in Burma came in and took it over in 1921.
BOC brought in a lot of much-needed expertise and the refinery was entirely rebuilt in 1923. Between 1931 and 1934 several new units, like the Dubbs Cracking plant, Edeleanu Plant and the first atmospheric and vacuum tube stills and oil heaters and fractionating columns were added to it. The Assam Oil Company, wholly owned by Burmah Oil Company made some major discoveries in Naharkatiya and Moran in 1953 and 1956 respectively.
The enterprise went into a new phase with the birth of Oil India Ltd (OIL) on February 18, 1959, a joint partnership between AOC/BOC and the Government of India. The new rupee company with headquarters at Digboi (shifted to Duliajan in 1962) was registered with an authorised capital of Rs 50 crore. In July 1961, BOC and the Government of India became equal partners in OIL.Twenty years later, on October 14, 1981, OIL became a full-fledged public-sector undertaking.
Almost simultaneously, in 1981, the historic Digboi refinery, along with all marketing assets of Assam Oil Company was vested with the Indian Oil Corporation by an Act of Parliament, while the Digboi oilfield was transferred to Oil India Ltd which itself became a wholly-owned undertaking of the Government of India. But the Digboi refinery along with its original marketing assets continue to enjoy a separate identity known as Assam Oil Division (AOD) within Indian Oil Corporation, with its famous logo of a running one-horned rhinoceros continuing to survive the test of time.

“The human race has come a long way since oil was first struck in the deep jungles of Upper Assam,” says Pasrija, CMD of the present-day avatar of the original company that is continuously engaged in exploration of hydro-carbons. “We haven’t just emerged from the story of a small group of adventurous persons manually digging for oil, braving all odds in a strange country, but we have today become a global company, with operations spreading out to as many as six nations of the world,” he says.
“Though we were originally confined to operations only in the Northeast, today we are present all over, from the Mahanadi and Krishna-Godavari basin on the east coast to Kutch, Saurashtra and Mumbai on the west coast. We are also there in Ganga valley (Uttar Pradesh) and Rajasthan, and have as many as 21 blocks at our disposal across the country,” adds Pasrija.
And outside India, Oil India Ltd has its presence in as many as six countries, these being Libya, Gabon, Nigeria, Yemen, Sudan and Iran. “We currently have six blocks in Libya, two in Yemen, and one each in Gabon, Iran and Nigeria apart from working on a pipeline in Sudan,” says Pasrija.
Oil India is a pioneer in laying pipelines, having accomplished the gigantic task of laying south-east Asia’s longest pipeline in the late 1950s and early 1960s, covering over 1,400 kms from Duliajan to Barauni. With crossings like the one that spans over the mighty Brahmaputra and 77 other rivers, seven suspended crossings, three road bridges and 38 submerged crossings, it was then the most technically advanced single pipeline of its size anywhere in the world.
But that is not the end of the story. “Oil India is like a government for us, the people living in the districts of Dibrugarh and Tinsukia,” says Moni Manik Gogoi, who heads a group of young villagers near Naharkatiya that works for uplift of rural areas in collaboration with Oil India Ltd. “We are dependent on Oil India rather than on the state Government for our various needs,” he adds.
Oil India constructed and maintains over 1,000 km of roads in the two Assam districts where its activities are most concentrated. “I think what we have been doing for local people is part of our basic responsibility,” says Pasrija.
On the social side, young men working with Oil India are also considered the best-available grooms in the state. No doubt Oil India, or in popular parlance the tel company, has also become much a part of Assamese lore, finding frequent mention in Bihu songs and lyrics sung at marriages. In fact, several of Bhupen Hazarika’s immortal numbers refer to Duliajan and Digboi and the tel company as standards of employment and of course development.