Back to the cradle of India's oil industry amid Northeast energy push

A tripartite pact - amid the promise of removing Afspa from almost all of the Northeast - revives hydrocarbon exploration along the Assam-Nagaland border after decades of dormancy

India’s oil exploration journey began in Assam in the 1880s. Nearly 150 years later, as the West Asia crisis highlights the country’s dependence on imported energy, the government is turning back to the Northeast in search of a hydr­ocarbon jackpot. The renewed push comes as security conditions improve across much of the region, with the Centre proposing to withdraw the Armed Forces (Special Powers) Act (Afspa) from almost the entire Northeast next year. 

On June 11, the Centre signed a tripartite memorandum of understanding (MoU) with the governments of Assam and Nagaland to facilitate oil and gas exploration in a disputed border area. The agreement is aimed at unlocking hydrocarbon resources that have remained largely untapped for more than three decades. According to the Assam government, the agreement covers more than 1,000 sq km along the Assam-Nagaland border. Officials estimate that the region’s current extraction capacity of 1,000-1,500 barrels a day could increase tenfold. “The Northeast gave birth to India's petroleum industry; today, it stands ready to power the next chapter of India's energy journey as Nagaland will produce oil and gas again after 31 years,” said Petroleum and Natural Gas Minister Hardeep Singh Puri in a recent post on X. 

India imports about 90 cer cent of its crude oil requireme- nts, 50 per cent of its natural gas needs and 60 per cent of its liquefied petroleum gas consumption. 

Birthplace of India’s petroleum industry 

The Northeast occupies a distinctive place in India’s energy history. The country’s first commercially successful oil well was drilled at the Digboi oilfield in Assam. Puri said Assam accounts for nearly 22 per cent of India’s crude oil reserves and around 15 per cebt of its natural gas reserves, while Nagaland holds significant hydrocarbon potential in the Naga-Schuppen Belt of the Assam-Arakan Basin. 

Union Home Minister Amit Shah said the agreement would support development in the region while helping address border issues that have complicated exploration efforts. “The tripartite agreement signed today reflects the shared commitment of the Government of India and the state governments of Assam and Nagaland to ensure a stable, secure, and conducive environment for petroleum exploration and production activities in the identified Areas of Interest,” Shah said. 

He said the agreement expands exploration opportunities across Nagaland beyond six designated fields and opens fresh possibilities for mineral extraction. The region holds deposits of oil, gas and other minerals that have remained difficult to access because of law-and-order challenges, he added. “With just one MoU (memorandum of understanding), the extraction capacity of 1,000-1,500 barrels per day can be increased by 10 times. In one field alone, there are possibilities of recovering more than ₹15,000 crore. If we extract the oil deposits spread across Nagaland, we would be able to reduce dependence on foreign countries for our oil needs.” 

The home minister also said Afspa would be withdrawn from the entire Northeast next year, barring one or two states. Since 2019, 12 accords signed between various groups and state governments in the region have contributed to an around 80 per cent decline in violent incidents, he said. 

The phased withdrawal of AFSPA began in Assam in 2022 after the state had rema­ined under the law since 1990. It currently remains in force in Tinsukia, Charaideo and Sivasagar districts, as well as in pockets of Manipur, Nagaland and Arunachal Pradesh. 

Enacted for the Northeast in 1958, Afspa grants special powers to the armed forces operating in areas designated as “disturbed areas”. Such designations are made after cons­ultations between central and state agencies based on the prevailing security situation. 

Today, most northeastern states are governed by the Bharatiya Janata Party (BJP) or its allies in the National Democratic Alliance (NDA), including Arunachal Pradesh, Tripura, Assam, Manipur, Meghalaya and Nagaland. Of the seven northeastern states, only Mizoram is governed by a party outside the NDA. 

The agreement is expected to provide greater certainty for hydrocarbon operations and encourage investment in the upstream petroleum sector. It establishes a coordinated framework for mineral oil operations, aimed at ensuring operational continuity, the safety of personnel and assets, and coordination among stakeholders.

 

Unlocking potential 

Assam

*  Accounts for nearly 22% of India's crude oil reserves 

*  Has 15% of the country’s natural gas reserves 

Nagaland 

* Significant hydrocarbon potential in the Naga-Schuppen Belt of the Assam-Arakan Basin  Home minister on the agreement 

*  With just one MoU, the extraction capacity of 1,000-1,500 barrels per day can be increased by 10 times

*  In one field alone, there are possibilities of recovering more than ₹15,000 crore 

 

With inputs from Archis Mohan