The oil and gas scenario in the North East poses challenges in the form of static production of crude oil and un-economical transportation of the surplus products from the region. This observation has come from Anand Kumar, director (R and D), IOCL. Speaking at the recently concluded two-day seminar on Hydrocarbon Industry, Growth, Prospects and Challenges in North East jointly organised by IOCL, Guwahati Refinery and Petro Tech Society, New Delhi at the premises of Guwahati Refinery, Kumar said that static production has become a concern for the oil companies as the refining capacities in the region were in excess of the crude oil production. "The other challenge is the un-economical transportation. The allocation of 1.5 MMT Ravva crude oil to BRPL has bridged part of the gap, but is not sufficient enough for full capacity utilisation of the NE refineries,' said Kumar. Kumar further said that since NE refineries were located far off from coastal areas, import of crude oil was not always cost effective. On the other hand, pointing out the opportunities, Kumar said Tripura, Bangladesh and Myanmar with available natural gas can form special economic region like the UAE for free flow of trade. "North East is endowed with rich deposits of coal and shale oil. The oil shale reserves which can yield a liquid similar to natural crude oil can sustain production of 140 million tons of crude oil for 100 years,' said Kumar adding that Assam has a reserve of 295 MMT of low ash high sulphur coal which has the possibility of being converted into liquid fuel. Dr BK Das, MD, NRL while elaborating on the prospects for growth of hydro carbon industry in the region said that by 2011-12 crude oil production in the region would increase from the current 4.4 MMT per annum to 5.6 MMT per annum, but even this 27 percent would not be sufficient to meet the requirements of refineries in the region. "The only prospects for refining sector growth in NE lies in exploring the natural markets in geographically contiguous countries on an economically justifiable basis. He further said that annual demand for petroleum products in the region was only 2.1 MMT against production of around 5.8 MMT leading to over 60 percent surplus.