The Telegraph
Since 1st March, 1999
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ONGC in Nagaland return signal

New Delhi, May 30: After nearly a decade, crude oil production may be revived in Nagaland. Plans are being chalked out for a joint agreement between the Neiphiu Rio government and the Oil and Natural Gas Corporation (ONGC).

But this would bear fruit only if Naga village councils get a share of the royalties shelled out by theONGC. A question mark would still hang over the fate of oil exploration in the state since insurgent outfits had earlier stymied it.

At a high-level meeting today between representatives of ONGC and the Nagaland government, the corporation agreed to look into some of the recommendations put forward by the state government.

“ONGC has shown interest in our suggestion that local interests have to be taken into consideration if drilling is to materialise in the state. Earlier, problems arose because the sentiments of the local people were brushed aside,” said home minister T.M. Lotha, who was part of the delegation headed by Rio.

The Nagaland government ordered ONGC to stop work in 1994, after it had drilled 25 wells and was producing 250 tonnes of crude oil everyday at Changpang in Wokha district.

The dispute was spawned by the land ownership pattern in the state. Land is held communally and the issue whether the state government or the local chiefs should receive royalty snowballed into a major controversy. It ultimately forced the public sector unit to wind up operations.

Till 1994, ONGC had paid nearly Rs 33 crore as royalty to the state government.

Lotha said apart from paying royalty to the government, ONGC was asked to consider payment of two per cent royalty to the village councils as well. “Otherwise, drilling by ONGC may not be possible. We cannot initiate any programme without taking local sentiments into consideration.”

Oil was first struck in Nagaland in 1973 though commercial production of crude started only in 1981. Explorations by ONGC and the Geological Survey of India have showed that the state has reserves of 600 million tonnes of crude oil and natural gas spread over an area of 600 square km. Earlier, operations were also hampered by threats from militant groups.

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