The Telegraph
Since 1st March, 1999
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‘Goldmine’ Nagaland serves ultimatum on oil giant

Gangtok, Sept. 10: The Nagaland government has decided to serve an ultimatum to the Oil and Natural Gas Corporation (ONGC) to resume oil exploration in the state at the earliest or make way for foreign companies.

Chief minister Neiphiu Rio, who is here for a brainstorming session on investment in the Northeast, said companies from Canada, France and Germany would be given the opportunity to tap his state’s oil resources if the ONGC continued to dither on resuming its operations there.

He said oil companies based in the three countries had already evinced interest in Nagaland, which has oilfields spread over 6,000 square km.

The ONGC suspended operations in the Champang oilfield in 1994 following objections by the NSCN (Isak-Muivah) and the Naga Students’ Federation on different grounds.

Rio said his government had assured the ONGC of adequate security and steps to end the impasse over land acquisition, but the oil major had yet to show any sign of resuming exploration.

“We fail to understand why the ONGC is not coming forward. I held discussions with top ONGC officials in New Delhi and my cabinet has already taken a decision to redress the land ownership problem.”

The chief minister said the only bottleneck in inviting foreign companies to explore Nagaland’s oil reserves was the Restricted Area Permit system. He said his government would formally request Delhi to ease the rules to enable foreign companies to invest in the state’s oil sector.

On militants serving extortion notes on ONGC employees before the suspension of operations, Rio said the situation in Nagaland had improved considerably with all NGOs and the Naga community as a whole supporting the ongoing peace process.

“There is no justification in ONGC citing law and order as the reason for not resuming its operations. We have decided to tell the ONGC to either take it up or give it up. We are sitting on a goldmine and cannot wait for the company to explore it for us.”

The ONGC had seven rigs at Bhandari and Champang, in Wokha district, before threats from militants forced it to beat a hasty retreat.

Delhi has offered Nagaland a preferential oil royalty rate of 22 per cent, which is two per cent more than that fixed for other states, as an incentive for allowing resumption of operations by the ONGC. The state will continue to get two per cent more oil royalty than other states even if the rate is revised again, sources said.

The petroleum ministry last revised the rate of oil royalty in March, raising it from 12 to 20 per cent.

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