Richa Mishra - Unfilled Barrels: Indias oil story

UNFILLED BARRELS

UNFILLED BARRELS

Indias Oil Story

Richa Mishra

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First published in India 2022

This edition published 2022

Copyright Richa Mishra, 2022

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ISBN: HB: 978-93-54350-12-2; e-Book: 978-93-54350-28-3

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To Babuji, AT, IT, JT

CONTENTS

Its been called black gold. Daniel Yergin, the pre-eminent chronicler of the history, geopolitics and geo-economics of global oil, titled his first classic on the subject The Prize. The exploration, extraction, refining and even sale of oil have been shaped by and in turn have shaped the dynamics of power both at the global and at the national level for a century. The power to access and price oil generates wealth and power in a variety of ways. No wonder, the armed forces of the worlds most powerful nations remain focused on oil wherever it is to be found. Its no surprise that governments have been toppled and nations redesigned in search of oil.

The story of Indian oil has not been as dramatic as the global story that Yergin continues to tell us in his many books, but it has been equally political and linked to power politics ever since oil was discovered in India in the late 19th century. Until the 1960s western oil companies like Burmah Shell, Standard Oil and Caltex dominated the sector. Between 1974 and 1976 Prime Minister Indira Gandhi nationalised all three and created the public sector behemoths that functioned under the supervision of the Ministry of Petroleum. The prime minister inducted into her cabinet an oil technologist, Keshav Dev Malaviya, to steer the new ministry and lead the growth of Indias oil industry.

Richa Mishra, who has devoted most of her professional life to study and report on the oil and gas sector, offers a tour dhorizon of how this strategic sector developed over the past half century. Beginning with the story of the discovery of oil in Assam, Jawaharlal Nehrus early decision to pay attention to exploration of oil and winding up with a focus on contemporary policies and challenges, Mishra weaves a series of facts into an interesting narrative.

What will make Mishras book thought-provoking to the lay reader, indeed to anyone who drives into a petrol station, is that it is a beat reporters account of the industry. Mishra has been a pre-eminent reporter on the petroleum and natural gas beat, covering the sector for a quarter century. It goes to her credit that she remained an intrepid journalist, always seeking answers to questions without allowing herself to be distracted or diverted in any way. Given the interests involved and the interplay between business and politics in oil, it is not an easy beat for journalists and Mishra has succeeded in making her presence felt. To quote her, I realised that if I had to succeed in this beat, I had to be aggressive and give as good as I get. Those trying to defame others dont understand the language of silence.

Petrol, diesel and LNG prices touch every citizen. Millions of Indians pull up at petrol stations and feel the impact of both global and national politics on their wallets even as they fill their fuel tanks and watch posters of Prime Minister Narendra Modi. Given the centrality of money and power to oil, one cannot understand any aspect of policy without understanding another. The inter-relationship between pricing policy, exploration policy, import and export policy, and refinery policy is often obscured from the public eye.

Mishra offers us a brief account of the history of oil exploration policy, the role of Malaviya in the growth of the public sector, the pioneering work done by the Oil and Natural Gas Commission, the role played by foreign oil companies in exploration and, finally, the emergence of corporate rivalry in the sector with big firms like Reliance, Essar and Cairn Energy stepping in. Mishra has not pulled any punches in presenting the kind of forces that are at play in almost every aspect of the oil and gas policy.

Mishras focus is firmly on the domestic sector. As India enters its 75th year of freedom, its dependence on imported oil continues to be inordinately high. The acceleration of economic growth after 2000 has further increased Indias external dependence on oil and gas with imports accounting for 80 per cent of the consumption. This has shaped Indias external security and foreign policy, with all manner of policy consequences. That, however, is another story. I am sure readers will enjoy reading this book as much as I did.

Sanjaya Baru

Former newspaper editor and

media adviser to Prime Minister Manmohan Singh

Ever wondered why Nagesh Rao has to pay more to fuel his car or why Kanika Devi has to readjust her household budget to be able to buy her cooking gas cylinder? What has all this got to do with Mukesh Ambanis Reliance Industries Limited (RIL) or public sector giant Oil and Natural Gas Corporation (ONGC)? The answer lies in oil and gas.

Indias oil story, like every multi-starrer film, has a host of characters, both good and bad, and a few shades of grey. But should we look at only the grey areas? Should we not try to analyse the journey and find some bright spots?

According to recorded information, Indias oil story began from its north-eastern corner. The first well dug at Digboi field in Assam by the Assam Railways and Trading Company Limited, registered in London, is said to be the first commercially successful oil discovery (200 gallons per day). The story goes that a herd of logging elephants returned to their camp with their feet covered in oil after a night-time excursion to find food and water. The men followed the trail to a salt lick where seepages were prolific. Seeing this, the elated English owner cried out to his men, Dig, boy, dig. Perhaps, the place gets the name Digboi from this phrase.

When I sit back and recollect my journey as an oil journalist, I feel there have been many such positive aspects. However, Indias geology throws interesting challenges, a reason why Indias oil appetite is far from satiated. Before we go any further, it is important to understand that the protagonist of this book is the upstream segment of the oil and gas sector in India.