Oil at the Crossroads: Assam Bets Big as Global Oil Order Shifts

At the heart of this policy shift lies the strategic transfer of key oilfields, including the Dhansiri Valley basin and Gaurisagar block, to private energy majors such as Vedanta’s Cairn Oil & Gas and Reliance Industries, under the Central government’s Hydrocarbon Exploration and Licensing Policy (HELP). For Assam, historically dependent on public sector giants like Oil India Ltd. (OIL) and ONGC, this signals a paradigm shift in resource management and political economy.

OPEC’s Woes, India’s Turn Inward

The backdrop is telling. With OPEC+ struggling to maintain its grip on global crude prices—now fluctuating between $70 and $85 a barrel—due to sluggish demand in China, oversupply concerns, and increasing competition from U.S. shale and African producers, oil-importing nations like India are feeling the heat.

Pushing for higher royalty returns (12.5% on crude, 10% on gas),

Monitoring CSR compliance by new entrants, and

Seeking infrastructural leverage—roads, pipelines, jobs—from private operatin

Oil and natural gas have historically accounted for over 10% of Assam’s state GDP, but stagnating public-sector output, ageing wells, and bureaucratic inertia have stalled growth. Private participation is seen as the game-changer.

What’s at Stake: Economy, Ecology, and Equity

However, the opportunity is laced with risk.

Several oil-bearing zones—including the Dhansiri, Dehing Patkai, and parts of the Kaziranga buffer—are ecologically sensitive. Past incidents continue to raise red flags. In 2017, the Dikom blowout near Dibrugarh led to a massive fire and environmental damage. Just this year, a gas leakage at the Gaurisagar field in Sivasagar prompted fresh concerns over safety protocols, local panic, and ecological vulnerability.

These episodes—alongside the catastrophic Baghjan blowout in 2020—have amplified public demands for stricter oversight, compensation, and transparent regulation.

Moreover, land acquisition and tribal rights remain contentious. The Dhansiri block, partly located in Karbi Anglong, has already seen murmurs of discontent over perceived lack of local consultation.

Delhi’s Design, Assam’s Assertiveness

While the Centre retains control over licensing and policy design, Assam is seeking a larger voice.

The state is reportedly pushing for a State-Specific Development Agreement (SSDA) clause to be attached to new oilfield contracts—mandating minimum local employment, CSR investment in affected areas, and profit-linked contributions to a proposed “Assam Oil Fund.”

Chief Minister Himanta Biswa Sarma has also proposed an Energy Skill Park in Upper Assam, in collaboration with IIT-Guwahati, to train youth for upstream and downstream oil operations.

The Road Ahead: Between Promise and Precarity

As the world moves toward renewables and India targets net-zero by 2070, Assam’s oil drive may seem contradictory to green commitments. Yet, analysts point out that for the next two decades, fossil fuels will remain India’s economic backbone—even as it expands solar and hydrogen capacities.

For Assam, the oil revival could become a double-edged sword: it may generate critical revenues and jobs, but if mismanaged, could trigger ecological damage, social backlash, and corporate profiteering—as past disasters like Dikom, Baghjan, and Gaurisagar caution.

The stakes are high. In a world where oil no longer guarantees power, Assam must ensure its resources don’t become just another extractive tale, but a sustainable development story.