The Ministry of Petroleum and Natural Gas on Friday, 12 June signed a tripartite Memorandum of Understanding (MoU) with the state governments of Assam and Nagaland, establishing a formal cooperation framework to accelerate domestic exploration and production (E&P) of oil and gas in the North East. The agreement was signed in the presence of Home Minister Amit Shah and marks a significant step in India's push to reduce import dependence by unlocking untapped hydrocarbon reserves.

Why the North East Matters for India's Energy Security

Assam alone accounts for approximately 22 per cent of India's crude oil reserves and around 15 per cent of its natural gas reserves, making it one of the country's most hydrocarbon-rich states. Nagaland, meanwhile, holds significant hydrocarbon potential in the Naga-Schuppen Belt of the Assam-Arakan Basin — a geological zone that encompasses both naturally flowing resources and large untapped deposits. Petroleum Minister Hardeep Singh Puri described the E&P outlook for the region as 'extremely promising.'

What the MoU Provides

The tripartite agreement creates a structured framework for inter-governmental cooperation, designed to give investors regulatory certainty, ensure operational continuity, and enable coordinated decision-making across state and central jurisdictions. According to Minister Puri, these conditions are essential for attracting the long-term capital commitments that large-scale hydrocarbon exploration requires.

Notably, the MoU opens a new basin for fresh wildcat exploration — high-risk, high-reward drilling in areas with no prior production history. This signals a deliberate policy shift toward frontier acreage in the region.

Nagaland to Resume Oil Production After 31 Years

One of the most consequential aspects of the agreement is the resumption of mineral oil operations in Nagaland, which has not produced oil and gas commercially for 31 years. Minister Puri stated that 'the North East 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.'

He also acknowledged Nagaland Chief Minister Neiphiu Rio and Assam Chief Minister Himanta Biswa Sarma for 'rising above differences' to advance the regional and national interest — an implicit reference to the longstanding boundary and resource-sharing disputes between the two states.

Expected Economic Impact on the Region

The resumption of E&P operations is projected to generate both direct and indirect employment across the North East Region. Officials indicated that the activity would stimulate local entrepreneurship, strengthen physical infrastructure, and create business opportunities for contractors, service providers, and small enterprises in surrounding communities.

This comes amid a broader Centre-led drive to raise India's domestic crude output, which has stagnated for years as ageing fields in Assam and Gujarat declined faster than new discoveries could compensate. The North East, with its relatively under-explored basins, is increasingly central to that strategy. With wildcat drilling set to commence and a regulatory framework now in place, the pace of activity in the Assam-Arakan Basin will be closely watched by both industry and policymakers.