Nagaland Pushes for Oil Exploration to Boost Economy, Resolve Decades-Old Deadlock

Kohima, Mar 7: The issue pertaining to “exploration and extraction of petroleum oil in Nagaland” was discussed under matters of public importance today in the Nagaland legislative assembly where several legislators voiced out the need to explore and extract petroleum oil and natural gas in Nagaland.

Nagaland Chief Minister, Neiphiu Rio addressing the issue, reaffirmed the State Government’s commitment to resuming petroleum oil exploration and extraction in the State.

Highlighting Nagaland’s rich oil reserves, the Chief Minister recalled that exploration activities began in 1973 when the Oil and Natural Gas Corporation (ONGC) first discovered petroleum in Changpang, leading to production in 1983. However, operations were halted in 1994 due to issues such as royalty disputes and unauthorized production beyond the state government’s permitted limit.

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To facilitate oil exploration, the Nagaland Petroleum and Natural Gas Regulations and Rules were notified in 2012, and Metropolitan Oil and Gas Pvt. Ltd. was granted permission for exploration in Wokha district. However, legal challenges arose, including a Public Interest Litigation (PIL) that was later withdrawn. The Gauhati High Court took up the matter suo moto, and the case remains pending.

The Chief Minister revealed that the State Government has been actively engaging with the Ministry of Petroleum and Natural Gas (MoPNG) since August 2018 to resolve the deadlock and resume operations under Nagaland’s special constitutional provisions. Meetings with central and state stakeholders, including a key discussion in Dimapur on September 21, 2021, addressed potential solutions such as permitting ONGC to resume operations and integrating Nagaland’s oil blocks into the Open Acreage Licensing Policy (OALP).

As part of the negotiations, the Ministry of Petroleum and Natural Gas proposed a Tripartite Memorandum of Understanding (MoU) between the Government of India, the Nagaland Government, and the Assam Government, along with a Bipartite MoU specifically for Nagaland. The State Government has submitted its comments and suggestions on the draft MoUs.

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Chief Minister Rio also met Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, on September 9, 2022, where he urged the formulation of a Nagaland-specific petroleum policy. Key proposals included creating smaller exploration blocks to attract more bidders, ensuring royalty and revenue sharing with the people of Nagaland, and setting up a refinery within the state, Rio added.

Acknowledging the ongoing legal proceedings, Rio emphasized that the proposed measures were interim arrangements designed to facilitate exploration and revenue generation without prejudicing the pending Supreme Court case. He stressed that a revenue-sharing mechanism is crucial, particularly for the Disputed Area Belt (DAB), covering sectors A to F.

To push forward the agenda, the Ministry of Petroleum and Natural Gas constituted a High-Level Committee, which visited Kohima on October 8, 2024. Discussions continued on November 13, 2024, with a focus on ensuring economic viability based on the production volume, Rio also said.

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Concluding his statement, Neiphiu Rio reiterated that unlocking Nagaland’s petroleum potential would significantly improve the state’s financial standing. “Nagaland is rich, yet our people remain poor. It is time we work together to harness our natural resources for the benefit of all,” he stated.

Minister of PHE, Jacob Zhimomi expressed support for the exploration of petroleum and natural resources but raised concerns about revenue sharing in the disputed belt. However, he did not oppose the concept of revenue sharing. He suggested a phased approach to ensure a successful and productive exploration of petroleum.

Partaking in the discussion on the issue pertaining to ‘exploration and extraction of petroleum oil in Nagaland,’ MLA, Dr. Sukhato A. Sema expressed concern that any delay in the exploration of oil, natural gas, petroleum products and minerals may cost us dearly as the crude oil may get exhausted, so also petroleum products, minerals may lose its relevance in the future. He cited how, on average, “our neighbouring State of Assam earns approximately more than 2,000 crores annually as royalty from oil and gas loan, while Nagaland is getting none”. Stating that the window of opportunity is open till the time crude oil remains relevant and valued, he said that the present and the future generation should not be deprived of the economic benefits that can accrue if oil exploration resumes in Nagaland.

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Dr. Sukhato pointed out that Nagaland State could not follow through with the extraction of oil inside Nagaland due to various internal differences arising out of Article 371 (A), civil societies argued that in view of Article 371A, “outsiders shall not be allowed to extract oil as the land and its resources belong to its people, and the Naga political groups said that oil should not be extracted inside Nagaland till we get independence”. On the other hand, the Government of Assam continues to develop oil fields along our borders, and it is now 51 years old that oil extraction has been operational between the Assam and Nagaland boundary, and also inside the State of Nagaland, he also stated.

Dr. Sukhato appealed to the Nagas to introspect and resolve “our past differences” in this matter and at the earliest, take appropriate decisions on the Assam-Nagaland boundary wells and also the oil fields that are inside our State. He concluded that the sense of urgency for oil exploration in Nagaland is the need of the hour.

With regard to the ‘exploration and extraction of petroleum oil in Nagaland,’ MLA, Achumbemo said that the benefits that are due to our people have not been given. He expressed dismay over the fact that thousands and lakhs of metric tons of crude oils have been taken away from our people. Stating that initially, an exploration license was given to the Oil and Natural Gas Commission (ONGC) for exploration, whether there is oil or not, but they went into extraction, and now it is in the production stage.

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Achumbemo Kikon informed that Changpang Landowners Union and the Tssori Old Landowners Union have given the ‘No Objection Certificate,’ provided the Government of Nagaland is ready to explore the petroleum oil. In this regard, he urged upon the State Government to expedite the matter which is still pending in the court. He appealed that there has to be an oil refinery in the State so that it will generate employment for youth, and can accommodate our people. He concluded that the benefits which are due for our people should not be sacrificed and should be protected for the benefit of the younger generation.

MLA Ar. Jwenga Seb, participating in the discussion on matters of urgent public importance under Rule 50, concerning the exploration and extraction of petroleum oil in Nagaland, expressed his deep concern about the state’s economic future and the need for financial self-reliance. He said that Nagaland, rich in natural resources, continues to depend heavily on external sources, with 90% of its energy needs being met by other states and that this dependency is stifling economic growth and preventing the state from fully utilizing its natural resources.

Seb also highlighted that energy is crucial for economic development and that without a stable energy supply, efforts for job creation, industrial expansion and infrastructure development remain unfulfilled and that Nagaland is geologically promising for hydrocarbon exploration, lying within the Naga-Schuppen Belt of the Assam-Arakan Basin, which has significant untapped reserves where there has been little systematic exploration since the 1970s and the full potential still remained unmeasured.

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Seb outlined the benefits of pursuing oil exploration, including economic growth, revenue generation, employment creation, infrastructure development, energy security, and strategic advantages for national energy security. The challenges, such as legal issues related to Article 371(A) and environmental concerns, were acknowledged, with Seb emphasizing the importance of balancing exploration with sustainability and ensuring fair compensation for local communities.

Seb then urged the State Government to issue a Petroleum Exploration Licence (PEL) to enable reputable companies to conduct detailed exploration under a Revenue Sharing Contract. This, he argued, would bring both immediate and long-term benefits, including job creation, localized hiring and increased infrastructure, while laying the groundwork for sustained oil production and reducing the state’s dependence on external resources.

In conclusion, Seb stressed the urgency of action to unlock Nagaland’s hydrocarbon potential, generate employment, stimulate local industries and secure long-term economic prosperity and called for decisive action to initiate a comprehensive oil exploration programme to pave the way for a self-reliant future for the State.

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(Newmai News Network)