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Production has restarted at the Khagorijan field in the Indian state of Assam after a 15-year pause, Indian media have reported, adding that production was suspended in 2007 due to environmental and regulatory issues.
The Khagorijan field was discovered in 1998, and first oil was extracted in 2004. However, severe erosion at the nearby Brahmaputra River caused local communities to start protesting against oil production in the area and interfering with the production process.
Things came to a head in 2007 when Oil India Limited decided to suspend production at the field. Now, according to Assam Chief Minister Himanta Biswa Sarma, measures have been taken to secure the river and prevent further erosion and the consequent adverse effects on local communities.
India is overwhelmingly dependent on imports to satisfy its oil demand and has been desperately trying to boost local production to alleviate the import load as much as possible.
Besides the restart of the Khagorijan field in Assam, India’s state-owned ONGC recently signed a preliminary deal with Exxon for deepwater exploration off India’s east and west coasts.
Meanwhile, India’s oil production is declining, averaging 600,000 barrels daily in June, down 4 percent from May and 1.6 percent from June 2021, Reuters reported earlier this month. The number was also 3 percent lower than expectations.
The latest import figures, for July, pegged the average at 4.63 million barrels daily, down 3.2 percent from June as refiners prepared for scheduled maintenance. Of this, some 877,000 bpd came from Russia and 825,000 bpd came from Saudi Arabia.
Because of its deep dependence on imports, India has become a top buyer of Russian oil after European sanctions reduced flows to Russia’s largest oil market. Discounts also helped, although these have been shrinking since spring. Earlier this year, Russia even overtook Saudi Arabia as India’s largest supplier of crude oil.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com