ONGC ready to return to Nagaland after 12 years

Vol 10, PW 11 (21 Sep 06) People & Policy

ONGC is set to return to the country's troubled northeastern state of Nagaland from where it was expelled by separatist insurgents in 1994.

Confirming this to PETROWATCH, state chief minister Neiphiu Rio said his government would sign a MoU with ONGC within a month, paving the way for the company's return. The MoU, said Rio, would allow ONGC to resume production from the discovered Changpang oilfield; explore for oil and gas in five other blocks in the districts of Mon, Tuensang, Wokha and Zuhneboto; and get a Petroleum Exploration Licence for block AA/ON-7, part of which falls within the state boundaries, and where Canoro Resources of Canada is operator.

Rio's comments follow a meeting in June with oil minister Murli Deora in which he promised to facilitate ONGC's return and ensure the safety of its personnel. ONGC was forced to stop exploration and production at Changpang in 1994 by the separatist National Socialist Council of Nagaland almost immediately after it discovered oil.

Naga separatists saw ONGC as an arm of the Indian government and banned it from exploiting the state's natural resources. But the NSCN has now undergone a change of heart.

Chief minister Rio tells us revenue from oil and gas will transform the economy of Nagaland, which has virtually no industries or modern transport infrastructure and survives on handouts from Delhi to meet even routine, day-to-day expenses. "We have sat on these (oil) resources for a long time," says Rio, "but now that oil prices are shooting up this is the right time to monetise this resource." Last year, Rio said his government prefers to deal with foreign oil and gas companies only, not Indian ones.

His about-turn is striking, particularly since the coalition he leads came to power more than three years ago with support from the same NSCN that originally expelled ONGC. On 8th August, Naga state authorities issued Canoro Resources with a Petroleum Exploration Licence for the 319-sq km portion of AA-ON/7 that lies within the state.

Canoro announced earlier this month that, "The Nagaland portion of the AA-ON/7 block contains prospective sub-thrust plays."

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