Assam, Nagaland sign landmark pact to unlock hydrocarbon reserves in disputed border areas

Guwahati, June 11: Assam and Nagaland on Thursday signed a historic tripartite memorandum of understanding (MoU) with the Ministry of Petroleum and Natural Gas to facilitate oil and gas exploration in disputed border areas, a move expected to unlock significant hydrocarbon reserves and boost economic growth across the Northeast.

The agreement, signed in the presence of Union Home Minister Amit Shah, seeks to transform long-contested border sectors into zones of economic cooperation by enabling the exploration and extraction of hydrocarbons while ensuring that both states share the benefits arising from resource development.

Assam Chief Minister Himanta Biswa Sarma said the decades-old boundary dispute had long hindered the utilisation of the region’s natural resources. The disputed areas, identified as Sectors A, B, C, D and E, have witnessed overlapping administrative claims that complicated hydrocarbon exploration and extraction efforts.

Under the MoU, the two states have agreed to jointly facilitate oil and gas operations and share the proceeds, including royalty revenues. Sarma said the agreement assumes greater significance at a time when India is seeking to enhance domestic energy production amid volatility in global energy markets.

“The region holds immense hydrocarbon potential. Assam and Nagaland have agreed to jointly facilitate its exploration and extraction while sharing the proceeds, enabling both states and the nation to benefit,” he said.

Union Petroleum and Natural Gas Minister Hardeep Singh Puri described the agreement as a major milestone in India’s efforts to increase domestic hydrocarbon production.

“The Northeast gave birth to India’s petroleum industry; today, it stands ready to power the next chapter of India’s energy journey. Nagaland will produce oil and gas again after 31 years,” Puri said.

He said the MoU opens up a new basin for fresh “wildcat” exploration and marks a significant advance in India’s quest to boost domestic exploration and production.

Puri noted that Assam accounts for nearly 22 per cent of India’s crude oil reserves and about 15 per cent of its natural gas reserves, while Nagaland holds substantial hydrocarbon potential in the Naga-Schuppen Belt of the Assam-Arakan Basin.

“Resources where hydrocarbons flow naturally and those with huge untapped reserves make the outlook for exploration and production activities in the Northeast extremely promising,” he said.

The minister added that the resumption of oil and gas operations would generate direct and indirect employment, encourage local entrepreneurship, strengthen infrastructure, and create opportunities for contractors, service providers and small businesses across the region.

Nagaland Chief Minister Neiphiu Rio termed the agreement a transformative moment, saying unresolved border issues had for decades restricted the development of resources in the area.

“Today’s MoU transforms years of dialogue into a framework that will benefit present and future generations,” Rio said.

He said the agreement would enhance economic activity, improve resource management and deepen inter-state cooperation through dialogue and mutual respect. Describing the pact as a “new era of brotherhood, collaboration and shared prosperity” between Assam and Nagaland, Rio said it would unlock the economic potential of the disputed sectors and convert an area of uncertainty into a corridor of economic growth.

The agreement is being viewed as one of the most significant examples of the two neighbouring states collaborating on economic development in disputed territories while broader efforts to resolve the long-pending boundary dispute continue.

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