Oil Ministry Opposes Nagaland Land Laws

The ministry for petroleum and natural gas has taken strong exception to the Nagaland government's decision to amend the Nagaland (Ownership and Transfer of Land and its Resources) Act, 1992.

The proposed amendment, according to the ministry, will come in conflict with twoCentral Acts _ Oil Fields (Regulation and Development ) Act, 1948, and the Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993 _ which are applicable to Nagaland by virtue of Section 26 of the Nagaland State Act, 1993.

The passing of the proposed amendment would vest the rights for grant of petroleum exploration licence and mining lease, even to the Oil and Natural Gas Corporation and Geological Survey of India, in the state government. The oil companies would also come under the purview of price fixation and royalty by the state government.

 

The petroleum ministry has written to the Union home ministry that after passing the amendment Bill, the Oil Fields (Regulation and Development) Act 1948 passed by Parliament would become ineffective in Nagaland.

Moreover, if the petroleum exploration licence and mining lease are granted by the state government without obtaining the Central government's approval, the latter will have no control on security aspects. are concerned.

In addition, the petroleum ministry has said, since fixation of price of oil and gas, including the amount of royalty, would be made by the state government, any arbitrariness or unrealistic view could make ONGC operations in the state unviable and unattractive. "This may result in slowing down of ONGC operations depending upon the price and the royalty which the state government may fix."

Besides fixation of price for oil and gas and also the amount of royalty, the state government can ask ONGC to sell all crude oil and gas only to the state government or corporations owned by it. The petroleum ministry has argued that this may create imbalance for supply of crude oil to the existing eastern sector refineries.

Moreover, the state government may appropriate a major chunk of the profits made from the crude oil and gas production within the state, thus setting off a chain reaction in other oil and gas producing states, including Assam and Gujarat, although none of them enjoy constitutional guarantees at par with Nagaland.