The Economy of India's Northeast
Oil in Assam
How Digboi became home to one of the world's oldest oil refineries, the role of oil and gas in Assam's economy, and debates over who benefits.
Assam has a long history with oil. Oil was discovered at Digboi in the late 19th century, and the Digboi refinery, commissioned in 1901, is one of the oldest operating refineries in the world.
Oil and gas today
- Oil India Limited and ONGC operate oil and gas fields in Assam.
- Refineries at Digboi, Guwahati, Bongaigaon and Numaligarh process crude.
- Natural gas supports fertiliser and power plants.
Economic importance
- Royalties are a significant source of state revenue.
- Jobs in oil companies and related industries.
- The Numaligarh refinery was set up under the Assam Accord of 1985, which promised economic development.
Debates
- Many in Assam argued that the state didn’t get a fair share of benefits from its oil, contributing to political movements.
- Environmental concerns: a 2020 blowout and fire at an Oil India gas well at Baghjan burned for months and damaged nearby wetlands and villages.
The future
Assam’s oil production has declined from older fields. New exploration and gas projects continue, and the Numaligarh refinery is being expanded.
In 2020, a gas well blowout at Baghjan caught fire, burning for months. Nearby villagers lost homes and livelihoods, and a wetland ecosystem was damaged, showing the local costs of resource extraction.
Assam's oil wealth didn't automatically translate into broad prosperity or local benefit.
- Digboi's refinery, commissioned in 1901, is among the world's oldest.
- Oil and gas provide royalties and jobs in Assam.
- The Numaligarh refinery came from the 1985 Assam Accord.
- The 2020 Baghjan blowout highlighted environmental costs.
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