The Telegraph
Since 1st March, 1999
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Nagaland seals new deal with ONGC

Guwahati, Feb. 16: The Oil and Natural Gas Corporation (ONGC) is set to resume operations in Nagaland through a new subsidiary in which the state government will have a stake.

Nagaland commissioner and secretary of zoology and mining Lalthara said over phone that chief minister Neiphiu Rio met Union petroleum minister Mani Shankar Aiyar and ONGC officials in New Delhi on Monday to flesh out the deal.

The ONGC suspended operations in the state in 1994.

Rio could not be contacted to confirm the new arrangement with the ONGC. He is in New Delhi, holidaying with his family. He is expected to announce the deal after returning to Kohima.

Lalthara said the government had suggested to the ONGC that the state-owned Mineral Development Corporation be made a partner in any oil-exploration exercise in Nagaland. He said the government wanted at least a 10 per cent stake in the new subsidiary.

'The people of the state should feel they are partners in the project. The petroleum ministry and the ONGC have accepted our offer,' the commissioner said.

Another senior official said 'the deal is on, barring a last-minute hitch'.

The oil and gas major at present has only one 'special purpose vehicle (SPV)', ONGC Videsh, for its overseas operations.

The company had to stop oil exploration at Champang in Nagaland's Wokha district in April 1994, following threats from militants and disputes over land. It had extracted 17.05 million metric tonnes of oil from 11 wells in Nagaland and paid Rs 33.5 crore as royalty to the state government before the operations came to a halt.

Landowners accused the oil major of duping them by backing out of its social commitments, including projects like hospitals, educational institutions and marketing centres.

Before pulling out of the state, the ONGC had projected oil reserves of over 20 million tonnes and recoverable reserves of approximately 6 million tonnes in Champang. It had also identified several prospective oilfields in Chumukedima.

The state government last year settled the land disputes involving villagers by agreeing to pay them 2 per cent of the royalty that it would receive from the ONGC. The government also promised to ensure that the oil major fulfilled its social commitments.

The Lotha Hoho, whose writ runs large in oil-rich Wokha district, subsequently agreed to let the ONGC resume operations in the area. Under the special provisions of the Constitution applicable to Nagaland, land belongs to the people and any agreement involving their territory must have their consent. The Lotha Hoho had initially said it would allow oil exploration by MNCs, but not the ONGC.

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