OIL aspiring to be a global E&P player

Oil India Limited ( OIL) has revealed that it has suffered losses/ damages to the tune of Rs 449.03 crore due to the Baghjan blowout.

This was revealed in the Integrated Annual Report and Business Responsibility and Sustainability Report of the Company for 2021-22 which was made public yesterday.

"In Baghjan Oilfield, a producing well (Baghjan #5) in Tinsukia district, Assam suddenly became very active during workover operations on May 27 2020, around 10:30 AM. The ongoing operations were immediately suspended as the well started releasing natural gas in an uncontrolled manner. To control the blowout immediate action was taken. The Company has also engaged ONGC Crisis Management Team and M/s Alert Disaster Control (Asia) Pte Ltd, Singapore to control the blowout" the company said.

"The blowout has been successfully controlled, the total losses/ damages for the blowout is Rs 449.03 crore which has been shown as Exceptional Item during the year ended 31st March, 2021" the company said.

The National Green Tribunal, Principal Bench, New Delhi through its order dated February 19, 2021 constituted a ten member committee headed by the Chief Secretary, Assam to look into the probable damage caused by the blowout to the environment and restoration measures, including measures for restoration of Dibru-Saikhowa National Park and the Maguri – Motapung Wetland.

However, an appeal was filed before the Supreme Court by Ms Bonani Kakkar challenging the above order of NGT regarding formation of the committee.

The Supreme Court vide order dated September 2, 2021 re-constituted the Committee with five members for “Assessment of the damage and preparation of restoration plan of Dibru Saikhowa National Park and Maguri-Motapung Wetland”.

The report of the committee was submitted to the Supreme Court and was shared with the concerned parties on the basis of order dated May 11, 2022 of the Apex Court. The committee in its report proposed a cost of Rs 1196 crore for redressal of damage and putting in place systems and institutional mechanisms, with share of OIL being Rs 980 crore and the balance to be borne by Govt. of Assam.

"The management is of the view that there will be no further liability for ecological restoration, addressing livelihood and socio-economics aspect related with restoration" it said.

The Integrated Report (IR) aims to provide a consolidated and transparent disclosure of its performance on various financial and non-financial parameters. Aligned with the global Integrated Reporting Framework, the report provides qualitative and quantitative parameters of OIL’s financial as well as non-financial performance for the period April 1, 2021 to March 31, 2022.

The report says the company aspires to be a global E&P player with operations at scale in at least two geographical clusters outside India, significantly higher production, reserves and cash flows while being known globally for our capabilities to extract value from mature assets.

Taking into considerations the core strength of the Company, India’s energy needs and global trends in oil & gas sector, OIL has defined six strategic pillars of growth that will help achieve 2030 aspirations.

"The aspiration 2030 not only depends on execution but also on developing capabilities in critical areas and reimagining the way OIL operates" the report says adding achieving this aspiration would establish OIL as one of the fastest growing Companies in India and will form a base for growth beyond 2030.

The company said environment sustainability is at the core of its approach and various interventions are being undertaken in order to reduce the carbon footprints and make our operations less energy intensive.

Despite numerous challenges, OIL performed excellently in FY 2021-22 to record its highest ever Profit After Tax (PAT) at Rs 3,887.31 crore as against the Rs 1,741.59 crore in the last year, primarily due to the improved price realisation of crude oil. Income from operations stood at 14,530.18 crores in FY 2021-22 compared to Rs 8,618.38 crore in last financial year.

On the operational front, OIL improved its crude oil production to 3.010 MMT compared to 2.964 MMT in the previous year, while production of natural gas stood at 3,045 MMSCM as against 2,642 MMSCM in FY 2020-21. Further, OIL produced 33,240 Metric tons of LPG and transported 6.18 MMT of crude oil through its crude oil pipeline and 1.516 MMT of petroleum products from Numaligarh-Siliguri product pipeline.

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