Digboi Refinery completes 100 years
By A Business Correspondent
Indian Oil Corporation Digboi Refinery in Upper Assam has completed 100 years of operations in December. The centenary was celebrated by releasing a special postal stamp by the Prime Minister. India's oldest refinery and the first in Asia, Digboi Refinery was commissioned in 1901. History was made more than a century ago in a remote corner in Assam in the midst of dense jungles when a group of Italian engineers, commissioned by the Assam Railways and Trading Company to build a railway line from Dibrugarh to Magherita, accidentally discovered oil. The fervent call of the leader of the team "Dig boy, dig" gave the place its name Digboi. The refinery has also the distinction of being the world's second oldest refinery. Originally a part of the Assam Oil Company, it became part of Indian Oil Corporation in 1981.
Oil was struck in Digboi in 1866, just nine years after oil was discovered in Pennsylvania, USA. In 1889, the first commercial well was struck in Digboi at a depth of 662 ft. In 1893, Assam Railways& Trading Company installed a tiny test refinery at Margheritta, about 20 km from Digboi. Crude oil from Digboi was sent there by rail. The products included limited quantities of kerosene, lubricating oil, timber staining and preserving oil, iron coating oil and wax.
Since AR&TC did not have any expertise of its own in drilling and petroleum refining, it set up a new company called Assam Oil Company in 1889 exclusively for taking care of its oil interests. AOC started construction of a full-fledged petroleum refinery in 1900 and commissioned it in 1901 with an annual production of 500 barrels.
In 1981, by an act of Parliament, AOC was merged with IOC and became the Assam Oil Division of IOC in the past two decades. IOC invested around Rs 1,500 crore to turn the Digboi refinery into a modern refinery. After the modernisation programme, the capacity was raised from 0.5 mtpa to 0.65 mtpa. The refinery now produces distillates, heavy ends and excellent quality wax from indigenous crude oil produced at the Assam oil fields. Petroleum products from the refinery are supplied mainly to north-eastern India primarily through road and rail wagons. A new delayed coking unit of 1,70,000 tpa had been commissioned in 1999. The refinery is implementing projects to improve quality of diesel by installing a hydrotreater and new solvent dewaxing for maximising parafin wax and to produce microcrystalline wax.
Digboi oilfield, now under OIL, is perhaps the only oilfield in the world, which has been producing oil for the past 100 years. The production has substantially dropped over the years, but some of the wells still ooze oil and many of them do so under natural pressure without the help of pumps. Digboi refinery has the distinction of being the first refinery in the country to export products to Australia, Germany and the UK. Parafin wax produced in Digboi is considered one of the best in the world.
The biggest challenge facing the management today is how to rationalise the workforce. For a refinery of the size of Digboi with a capacity of 0.65 mta, a workforce of 2,700 is considered to be on the high side. In today's context, no refinery of this small size can hope to survive, let alone thrive. In fact, a near-doubling of capacity is on the cards but the problems are two-fold-where to get the additional crude and where to sell the increased output.
Indian Oil Corporation has another refinery at Guwahati in Assam. The first public sector refinery in the country, it was commissioned in 1962 with a capacity of 0.75 mtpa which was subsequently increased to one mta through debottlenecking projects. The refinery processes only indigenous crude oil from the Assam oil fields. With its main secondary unit, a coking unit, it produces middle distillates and heavy ends and supplies such products to north-eastern India and Siliguri in West Bengal.
The Chennai Petroleum Corporation refinery
A view of Numaligarh Refinery