The Process of Oil exploration and extraction is so complex and delicate that it takes a well established and experienced company to undertake these upstream operations. If any company wants to undertake such an operation it requires three Core Units, viz. Drilling, Production and Geology/Geophysics. Any Company that do not possess all or any one of these Core Units of upstream operations cannot carry out feasible activities related to Crude oil exploration and extraction.
There are three phases in any upstream operations connected to petroleum exploration and extraction. The first phase is the exploration phase where seismic data are gathered and the Geologist or Geophysicist will interpret the data generated through this exercise. According to the interpretation of the Geologists the drilling engineers will make random drilling in an area believed to contain Oil bearing shelf or basin. This is to confirm the findings of the Geologist. The second phase is the development phase, where the company will install drilling rigs and other support structures for the production of crude oil. The third phase is the Production phase which involves the actual extraction of crude oil and the collection of such crude oil from different rigs in one place called as the Group Gathering Station (GGS). In all these three phases a company is required to enter into three separate agreements and then obtain three separate license from the Government and the affected landowners.
However, the most crucial issue to be addressed before the start of the upstream operations is the company’s policy or programme regarding SUSTAINABLE PRODUCTION. The implication of this policy is that if a company undertakes extraction of crude oil at a very fast pace in order to curtail production cost, the operation will damage the Oil basin or Shelf beyond repair and no further extraction can be done in the future. This kind of extraction is done by oil companies who enter into the operation with the motive of making maximum profit with minimum loss. In the process they end up destroying our reservoir of precious natural resources.
The production process should be planned in such a way that the crude oil is extracted at a slow and steady pace in order to prevent the collapse of the oil shelf or basin. In the light of the above facts, I wonder on what strength or expertise were the oil companies shortlisted by the Nagaland state government and now allotted license for oil exploration in our state. Lastly, on what weakness or grounds were some of the reputed oil companies who are members of the Association of Oil and Gas Operators (AOGO).
Charles Mhonthung Ezung
