Royalty row resolved, ONGC all set to return to Nagaland

Thirteen years after it was unceremoniously thrown out amid controversies over royalty...

Thirteen years after it was unceremoniously thrown out amid controversies over royalty and rights over resources, Oil & Natural Gas Corporation Ltd (ONGCL) is all set to return to Nagaland, with Chief Minister Neiphui Rio saying the row has been amicably resolved.

“We have managed to resolve the dispute over royalty on crude oil with ONGC agreeing to pay an enhanced rate,” Rio said. According to the agreement that the state Government arrived at with ONGCL, the latter would pay royalty at two per cent more than what other oil-producing states have been currently getting, he said, adding, “We are expecting ONGCL to resume its activities in the new year.”

The history of oil exploration in Nagaland dates back to 1973 when a Petroleum Exploration Licence was granted to ONGC by the state Government over an area of 7.91 sq km at Champang, which was subsequently expanded to about 16,500 sq km.

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A total of 30 wells were sunk in the state, of which 21 were found to be having good scope for oil and two others for natural gas, and a cumulative production of 1.04 million tonnes was extracted between 1991 and 1994.

ONGCL’s experience in Nagaland, however, had always remained bitter, especially with its engineers and technicians facing serious threats from one faction of the NSCN. A deputy GM was even fired upon, leading to panic, followed by a series of attacks on officers and even on CISF jawans engaged for providing security to the installations.

In 1994, one faction of the rebel group demanded Rs 1 crore for “extracting and exploiting a scarce natural resource belonging to the Naga Republic”. The Naga Students’ Federation too exerted pressure saying Article 317(A) of the Constitution provides for ownership of natural resources in the state of Nagaland with the people, and that ONGCL had no right to extract crude oil in the state.

ONGCL finally withdrew its operations in Nagaland in 1994, at a time when it was producing about 1.04 million metric tonnes of crude oil per annum. ONGCL had by then invested about Rs 360 crore in the state, with most of the machinery and equipments already becoming scrap by now.