The issue of “Exploration and Extraction of Petroleum Oil in Nagaland” took center stage on the fourth day of the sixth session of the 14th Nagaland Legislative Assembly (NLA), held at the NLA Hall in Kohima. Several legislators voiced their concerns and expressed the urgent need to explore and extract petroleum oil and natural gas from Nagaland, citing potential economic benefits for the state.
Chief Minister Dr Neiphiu Rio reaffirmed the state government’s commitment to resuming petroleum exploration in Nagaland. The Chief Minister recalled Nagaland’s history with oil, highlighting that exploration activities began in 1973 when the Oil and Natural Gas Corporation (ONGC) discovered petroleum in Changpang. This led to production in 1983, though operations were halted in 1994 due to disputes over royalty and unauthorized production beyond the state’s permitted limits.
Dr Rio noted that, in 2012, the Nagaland Petroleum and Natural Gas Regulations and Rules were notified, and permission was granted to Metropolitan Oil and Gas Pvt. Ltd. to explore oil in Wokha district. However, legal challenges and a Public Interest Litigation (PIL) later led to delays. Despite these hurdles, the state government has been engaging with the Ministry of Petroleum and Natural Gas (MoPNG) since August 2018 to resolve the deadlock and resume operations.
Discussions between the central and state governments have explored potential solutions, such as permitting ONGC to resume operations and integrating Nagaland’s oil blocks into the Open Acreage Licensing Policy (OALP). The Chief Minister revealed that the Ministry of Petroleum and Natural Gas proposed a Tripartite Memorandum of Understanding (MoU) between India, Nagaland, and Assam, with a Bipartite MoU for Nagaland specifically. The state government has provided its suggestions on the draft MoUs.
Dr. Rio also highlighted the importance of a Nagaland-specific petroleum policy, suggesting the creation of smaller exploration blocks to attract bidders, ensuring royalty sharing with the people of Nagaland, and the establishment of a refinery within the state.
Acknowledging the ongoing legal proceedings, Dr 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.
Legislators’ concerns on revenue sharing and legal hurdles
Minister of Public Health Engineering (PHE), Jacob Zhimomi, expressed his support for petroleum exploration but raised concerns regarding revenue sharing in the disputed belt. He suggested a phased approach to ensure that exploration progresses smoothly without escalating existing tensions.
MLA Dr Sukhato A Sema emphasized the urgent need to resume oil exploration in Nagaland, warning that delays could have significant consequences for the state. He raised concerns about the potential exhaustion of crude oil and the diminishing relevance of petroleum products and minerals in the future. Dr Sema highlighted that, while neighboring Assam earns over 2,000 crores annually from oil and gas royalties, Nagaland has not benefited from its own natural resources.
He stressed that Nagaland’s window of opportunity is limited, as crude oil’s value may decrease over time. Dr Sema argued that both current and future generations must not be deprived of the economic benefits that could arise from tapping into the state’s petroleum resources.
Dr Sema also pointed out the challenges that have hindered oil extraction within Nagaland, such as internal disputes related to Article 371(A), with civil society groups opposing extraction by outsiders, asserting that the state’s resources belong to its people. Naga political groups have also voiced opposition, insisting that oil extraction should only proceed once the region achieves independence. Meanwhile, Assam has continued to extract oil along the border for over five decades, with operations ongoing both in Assam and within Nagaland’s boundaries.
Dr Sema appealed to the people of Nagaland to reflect on past differences and work towards resolving issues related to the Assam-Nagaland boundary wells and the oil fields within the state. He underlined the critical need for immediate action to unlock the state’s oil exploration potential.
Support for local employment and economic growth
MLA Achumbemo Kikon expressed concern over the failure to provide benefits from the state’s petroleum resources to its people. He pointed out that while large quantities of crude oil have been extracted from Nagaland, the local population has not seen any substantial gains. He noted that the Oil and Natural Gas Commission (ONGC) was initially granted an exploration license, yet the focus shifted to extraction, and the project is now in the production stage.
Kikon highlighted that the Changpang Landowners Union and the Tssori Old Landowners Union have provided the necessary ‘No Objection Certificate,’ contingent on the state government’s readiness to proceed with oil exploration. He urged the government to expedite the matter, which remains pending in court, and stressed the need for an oil refinery in Nagaland. According to Kikon, establishing a refinery would not only create employment opportunities for the youth but also ensure that the state’s resources benefit its people. He concluded by emphasizing the importance of safeguarding these resources for the future generations of Nagaland.
MLA Ar. Jwenga Seb stressed the critical need for financial self-reliance in Nagaland. “Nagaland continues to depend on external sources for 90% of its energy needs, stifling economic growth,” he said. Seb pointed out that Nagaland lies within the Naga-Schuppen Belt of the Assam-Arakan Basin, which holds untapped hydrocarbon reserves that have remained underexplored since the 1970s.
Seb emphasized that oil exploration would not only stimulate economic growth, but also contribute to national energy security and job creation. He acknowledged the challenges, including legal issues related to Article 371(A) and environmental concerns, but called for a balanced approach that ensures fair compensation for local communities.
Seb urged the state government to issue a Petroleum Exploration License (PEL) to allow reputable companies to conduct detailed exploration under a Revenue Sharing Contract. “This will bring immediate and long-term benefits, including job creation, increased infrastructure, and reduced dependence on external resources,” he said.
A call for action
The debate concluded with a shared sense of urgency to unlock Nagaland’s hydrocarbon potential. Chief Minister Dr Rio encapsulated the sentiment, stating, “Nagaland is rich, yet our people remain poor. It is time we work together to harness our natural resources for the benefit of all.”
Legislators across party lines expressed a unified desire to see petroleum exploration resume, but also highlighted the need for careful consideration of revenue-sharing arrangements and local concerns. As the discussions continue, the future of petroleum extraction in Nagaland remains fundamental to the state’s economic development.