Nagaland launches its own licensing round

Vol 16, PW 12 (10 Jan 13) Exploration & Production

Fiercely independent Nagaland, home to a low level insurgency for over half a century, doesn’t like Delhi telling it what to do.

So it’s no surprise the landlocked north-eastern state on Myanmar’s border is holding a bidding round for oil and gas blocks in defiance of the oil ministry. PETROWATCH learns the Nagaland Petroleum & Natural Gas Board invited EoIs from companies interested in exploring for oil and gas across 11 districts on December 18.

“Nagaland is exercising a special provision of the Constitution of India,” says HK Khulu, chairman of the Nagaland Petroleum & Natural Gas Board, speaking from state capital Kohima. “The resolution was passed by the Nagaland state assembly.

” Five companies, he adds, submitted EoIs by the January 7 deadline. “I have not opened the sealed EoIs,” he says, “so I don’t know their names.

” Instead of PSCs, successful bidders will sign Revenue Sharing Contracts (RSCs) with the Naga state government. But the eligibility criteria for bidding or what incentives are on offer such as cost recovery have yet to be worked out.

Nagaland is prospective no doubt, but any company tempted would do well to remember ONGC’s sad experience in 1994 when it fled the state after local militants threatened to decapitate staff when it refused to share production revenue with local villagers. This is a state where the rights of ethnic Nagas over land and resources are paramount.

“No company can take oil and gas out of the state,” adds Khulu. “They can take out only oil and gas products processed in the state.