New Delhi: Production from state-owned Oil India Ltd’s fields in Assam is getting affected by renewed protests for a separate Bodoland state, taking a cue from New Delhi’s nod for creating Telangana out of Andhra Pradesh.

With protests intensifying across Bodo areas and Karbi Anglong in Assam for a separate state, the state-run explorer whose entire production of 3.8 million tonnes comes from the state, is worried about the escalating tension impacting its production targets.

“The daily production from Assam is getting affected. The state is quite sensitive about the Bodoland issue. The strife seems to be escalating. Our entire production is concentrated in Assam," said T.K. Ananth Kumar, director, finance. “Last year production fell by around 5%. Till this time this year, there has been no improvement."

This comes in the backdrop of India’s inability to meet domestic production targets and concerns about the production capabilities of state-owned firms and the need to find new reserves.

According to the petroleum ministry, as compared to a planned production of 41,309.502 million cubic metres (mcm) of gas in 2012-13, actual production was 40,676.670 mcm.

Similarly, of a targeted crude oil production of 40,046,000 tonnes last fiscal year, the country produced 37,865,000 tonnes.

Oil India has been unable to meet its targets due to several strikes and blockades in Assam. Of a gas production target of 2,919 mcm in 2012-13, it could only achieve 2,639.212 mcm. Of this, 2,424.653 mcm came from Assam. Also, of a production target of 3,950,000 tonnes of crude oil last fiscal year, the explorer produced 3,661,000 tonnes. Of this, 3,639,000 tonnes came from Assam.

In the first quarter ended 30 June production of crude oil was 0.903 million metric tonnes (mmt), as compared to 0.946 mmt in the corresponding period last fiscal year. However, natural gas production in the first quarter increased to 657 million metric standard cubic metres a day (mmscmd) from 626 mmscmd in the corresponding year-ago quarter.

“The decrease in crude oil production and sales quantity is due to certain bandhs and blockades, which affected operations in Q1 FY14," Oil India said in a statement on Tuesday.

Improvement in production from state-owned firms such as OIL is important given the limited supplies from India’s domestic energy sources and the country’s dependence on imports—as high as 80% for crude and 25% for natural gas.

India’s energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) today to around 1,500 mtoe, according to the oil ministry.

“We keep reviewing the situation and the security. Certain things are beyond our control," said Kumar.

India, China and West Asia will account for 60% of the world’s energy demand by 2035, when the price of imported crude will be $215 a barrel in nominal terms, the International Energy Agency (IEA) said in its World Energy Outlook 2012.

In a separate development, Oil India on Tuesday said its net profit in the three months to 30 June fell 34.5% to 609 crore on account of its subsidy burden—for supplying crude at a discount to state-run oil marketing companies, amounting to 1,982 crore—and low realization.

Oil India also registered a 14.3% drop in turnover for the quarter to 2,097.77 crore from 2,439.63 crore in the year-ago period due to a fall in crude oil prices.

Oil India’s gross and net realization per barrel of crude was $101.88 and $45.88, respectively, compared with $109.78 and $53.78 a barrel in the year-ago period.

Oil India shares fell 0.91% to close at 474.05 on BSE on Tuesday. The Sensex rose 1.49% to 19,229.84 points.

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