Kohima: Nagaland’s Chief Minister Neiphiu Rio has once again placed the revival of oil exploration and extraction at the forefront of the state’s economic agenda, asserting its potential to dramatically bolster state revenues and generate new avenues for economic development. He made this declaration within the state assembly, reiterating the government’s unwavering commitment to overcoming the long-standing obstacles that have impeded progress.
The state’s oil reserves, first identified in 1973 by the Oil and Natural Gas Corporation (ONGC) in Changpang, Wokha district, have remained largely untapped since production was halted in 1994. This cessation stemmed from disputes over royalty payments and instances of overproduction that exceeded permissible limits. In an effort to reignite the sector, the Nagaland Petroleum and Natural Gas Regulations and Rules were enacted in 2012, leading to the issuance of exploration permits to Metropolitan Oil and Gas Pvt. Ltd. in the Wokha district. However, these initiatives were quickly stalled by legal challenges, including a Public Interest Litigation and a suo motu case initiated by the Gauhati High Court.
Since 2018, the Nagaland government has engaged in continuous dialogue with the Ministry of Petroleum and Natural Gas (MoPNG) to address the protracted deadlock and ensure that any future petroleum operations comply with Nagaland’s unique constitutional provisions. A pivotal meeting held in Dimapur on September 21, 2021, with the Union Minister of State for Petroleum and Natural Gas and MoPNG officials, focused on facilitating oil and gas exploration under the Open Acreage Licensing Policy (OALP) and reinstating ONGC’s operations in Nagaland, including the Disputed Area Belt (DAB). This meeting led to the suggestion of a Tripartite Memorandum of Understanding (MoU) involving the Governments of India, Nagaland, and Assam, alongside a Bipartite MoU for Nagaland. The central government has already provided draft MoUs, and Nagaland has submitted its feedback.
In September 2022, Rio met with Union Petroleum Minister Hardeep Singh Puri to advocate for a policy tailored specifically to Nagaland. His key proposals included the creation of smaller oil blocks to attract a wider range of bidders, a revenue and royalty sharing mechanism that benefits local communities, and the establishment of a refinery within Nagaland. While acknowledging the ongoing Supreme Court case related to the matter, Rio suggested that these measures could serve as interim arrangements, operating independently of the legal proceedings. He also proposed an equal distribution of royalty revenues across all DAB sectors (A-F) until a final settlement is reached.
To further these discussions, the MoPNG established a High-Level Committee, which convened in Kohima on October 8, 2024. During this meeting, the Nagaland government reiterated the state’s constitutional special status and emphasized the necessity for a customized policy framework. A subsequent round of talks on November 13, 2024, saw MoPNG officials underscore that the economic viability of operations would hinge on the volume of production achieved post-exploration.
Rio concluded by emphasizing that the resumption of oil and gas production would significantly enhance Nagaland’s financial stability, reducing its reliance on central government funding. He asserted, “Nagaland is a resource-rich state, but our people remain poor. We must find a way forward to responsibly explore and extract petroleum for the benefit of our citizens.”
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