Nagaland Government needs to take concrete steps to resume oil and gas exploration — Kuzholuzo Nienu

Our Correspondent
Kohima, Sep. 20 (EMN): Leader of Naga People’s Front (NPF) legislature party and co-chairman of United Democratic Alliance (UDA), Kuzholuzo Nienu on Tuesday said it is ‘high time’ for the state government to wake up and take concrete steps to resume oil and gas exploration and production in Nagaland.

He stated this on the first day of the 12th session of the 13th Nagaland Legislative Assembly (NLA).

Nienu pointed out that it is a time-consuming process as the oil and gas blocks in India are awarded by the Central govt. through the Director General of Hydrocarbons (DGH) and oil companies.

He further stated that the Petroleum Exploration License (PEL) is granted for a period of seven years in inland /shallow water areas and eight years in deep water and frontier areas for exploration activities.

Adding that Petroleum Mining Lease (PML) is normally awarded for 20 years for producing hydrocarbons as per the Oilfields Regulation and Development Act, 1948 and P & NG Rules, 1959, he highlighted that PEL/PML offshore exploration and production is granted by the central govt., while for inland blocks it is granted by the concerned state government based on the recommendations made by the Union government.

‘The PEL does not allow the oil company to extract even a drop of oil for commercial purposes but only for research and development purpose’, he said.

“Only on completion of all the required modalities, the oil company will apply to the state government for PML so that after it is granted, production and monetising the asset can be done”, he said.

The legislator also opined that the special status that Nagaland enjoys under Article 371A of the Constitution of India has led to conflicts between the land owners, civil societies, state government, oil companies and even the government of India when it comes to oil and gas exploration, causing undue interferences and delays.

He then pointed out that in 2010, the Nagaland Legislative Assembly passed a resolution conferring itself with the power to make laws and regulations with respect to oil and gas sector and subsequently, the ‘Nagaland Petroleum and Natural Gas, Rules and Regulations (NP & NGRR) 2012’ was passed by the NLA in 2012. The Nagaland government then issued Expression of Interest (EOI) for 11 oil and gas blocks in the state. However, GoI termed the NP & NG Rules and Regulations 2012 ‘unconstitutional and invalid’ citing that the oil and gas sector comes under the Union List.

Yet, the govt. of Nagaland awarded the Champang block to the Metropolitan Oil and Gas Pvt. Ltd. (MOGPL), an oil company, which resulted in the Lotha Hoho filing a PIL in the Kohima Bench of the Gauhati High Court. Subsequently, the matter between the state govt. and the Lotha Hoho was resolved with the signing of a Memorandum of Understanding (MOU).

‘When the Kohima Bench of the Gauhati High Court filed a suo moto against the NP & NG RR 2012, all hope of exploration and production activities of oil and gas in the state stopped. Yet to find a way for resuming oil and gas exploration activities in the state, the Union Minister for Petroleum initiated a bipartite agreement with the state govt., the MOU of which is expected to be finalised and signed very soon’, he said.

Reiterating that exploration activities may take an average of five to seven years, he said that the mindset of the stakeholders including the state government should be on monetising the existing oilfields and getting immediate returns. He added that it will be pertinent for the state government to formulate policies wherein it can have a Participating Interest (PI) of 10% to 15% in the already existing oil fields like Champang and Tissori.

While asserting that the elders had the wisdom to preserve the natural resources for the upcoming generation, he maintained that today, oil is no longer considered to be the primary source of energy for the future owing to climate change and advancement in technology, as the world is shifting towards cleaner, sustainable and renewable energy.

He maintained that India has already achieved 10% ethanol blending, which is expected to reach 20% by 2025, while the Hydrocarbon Vision 2030, envisions that the entire Northeast is going to be connected to the national grid and make NE the hub of Compressed Natural Gas (CNG).

The legislator informed that this will provide CNG stations, green fuel for vehicles and also piped gas connection to the households for cooking and heating.

Nienu said the use of the golden liquid (oil) is expected to drastically come down by 2035 throughout the world including India, while adding that there are even projections that by 2050, the use of fossil fuels like coal, oil and gas would completely stop.

Meanwhile, Minister of Soil and Water Conservation and Geology and Mining, V Kashiho Sangtam in his statement said petroleum exploration commenced in Nagaland during 1971 and oil was first found in Changpang-Tssori in 1973.

Trial production started from 1981 till 1994 under P&NG Rules, 1959 made under the Oilfields (Regulation & Development) Act, 1948 of the government of India, and the Oil and Natural Gas Corporation (ONGC) extracted 1.022 MMT of crude oil.

He also stated that Rameswar Teli, Union Minister of State for Petroleum and Natural Gas, held a meeting with the chief minister of Nagaland on September 21, 2021 in Dimapur for resumption of exploration and production of oil and gas in the state. Pursuant to the meeting, subsequent meetings were held with secretary of Ministry of Petroleum and Natural Gas (MoPNG) and Hardeep Singh Puri, Union Minister for PNG, at New Delhi on October 11, 2021.

He said the Union Minister suggested the government of Nagaland and the MoPNG to come up with a bipartite MOU to facilitate resumption of exploration and production of petroleum and natural gas in the state.

Sangtam said the draft bipartite MoU is an alternative arrangement outside the court neither infringing Article 371 A nor within the purview of the PNG Rules, 1959. The MoPNG has shared the draft bipartite MoU to the state government and accordingly, the Nagaland govt. has incorporated the suggestions, and sent it to the Advocate General Nagaland, the reply for which is ‘awaited’.