In a significant development aimed at boosting India’s domestic energy production, the Centre, Assam, and Nagaland signed a tripartite Memorandum of Understanding (MoU) on June 11, 2026, to resume oil and gas exploration in the long-disputed Disputed Area Belt (DAB) along their shared border. The agreement, inked in the presence of Union Home Minister Amit Shah, seeks to unlock potentially massive hydrocarbon reserves that have remained untapped for nearly three decades due to persistent conflicts and administrative hurdles.

Estimates suggest Nagaland alone holds around 600 million tonnes of oil and natural gas reserves, which could substantially increase India’s onshore oil production — by as much as 75% according to some petroleum experts. The DAB, covering approximately 1,000–1,100 square kilometres along the 512-km Assam-Nagaland boundary, is part of the promising Assam-Arakan basin. However, despite the optimism surrounding the MoU, a multitude of formidable hurdles — ranging from unresolved political disputes to severe infrastructural challenges — continue to cast a long shadow over actual exploration and drilling activities.

Historical Context of Suspension

Oil exploration in the region, particularly along the resource-rich Assam-Nagaland border, came to a grinding halt in the 1990s. This suspension was triggered by a combination of escalating extremism, violent border clashes, opposition from local organisations, and disputes over ownership and royalty sharing. Operations by entities like ONGC faced repeated disruptions, with local groups forcing relocations and threatening infrastructure in areas such as Golaghat-Wokha and Uriamghat.

The border dispute between Assam and Nagaland dates back to the formation of Nagaland as a separate state in the 1960s. It has claimed over 150 lives over the decades and remains one of the most intractable inter-state issues in Northeast India. The DAB itself is divided into several sectors, many of which overlap with reserve forests and contested territories, making any development activity highly sensitive.

Persistent Border and Political Disputes

At the heart of the current challenges lies the unresolved inter-state boundary dispute. The Konyak Union, the apex body of the Konyak Naga community, has categorically stated that oil exploration should only proceed after full resolution of border disputes, particularly in sensitive belts like Tizit-Naginimora and areas bordering Arunachal Pradesh. They emphasise the need for territorial clarity, stronger border security, and explicit consent from landowners to prevent future conflicts.

Other Naga organisations, including the Naga Hoho and Lotha groups, echo these sentiments. They have urged both state governments to prioritise the settlement of the broader “Indo-Naga political issue” before implementing the oil pact. Extremist and rebel groups, some currently under ceasefire agreements, have gone further, describing any exploration before a comprehensive political settlement as “illegal.” This opposition stems from deep concerns over resource control, preservation of Naga identity, and protection of ancestral lands.

Article 371A of the Indian Constitution, which grants special safeguards to Nagaland regarding land, resources, and customary laws, adds another layer of complexity. Any exploration must navigate these provisions carefully to avoid legal and social backlash. The MoU is viewed by many as merely an enabling framework rather than a final solution, with critics arguing that proceeding without addressing these core issues could reignite violence.

Security Concerns and Law and Order Issues

The Northeast region’s history of insurgency makes security a paramount concern. The DAB was once described as a “no-go area” due to militant activities. Even today, despite improved overall stability and the removal of the Armed Forces Special Powers Act (AFSPA) from large parts of the region, underlying tensions persist. Past incidents of attacks on oil installations and personnel highlight the risks involved in resuming large-scale operations.

Local encroachments and alleged illegal immigration further complicate the security landscape. Joint eviction drives by Assam and Nagaland governments in recent years, targeting thousands of bighas of encroached forest land, have already led to tensions. Ensuring the safety of workers, equipment, and infrastructure in remote, forested, and hilly terrains remains a significant operational challenge.

Environmental, Topographical, and Infrastructural Barriers

Beyond politics and security, practical hurdles are immense. The terrain in the DAB is characterised by steep hills, dense forests, and poor connectivity — factors that make the transportation of heavy drilling rigs and equipment extremely difficult and costly. Former officials from Oil India Limited have highlighted the need for extensive logistical planning to operate in such conditions.

Environmental clearances have historically delayed or derailed hydrocarbon projects in the region. Many areas fall under ecologically sensitive zones, including reserve forests like Rengma, South Nambor, and Doyang. Obtaining necessary forest and environmental nods can take years, as evidenced by past experiences of companies like Essar Oil.

Encroachments on government and forest lands pose another obstacle. Reports indicate that a notable percentage of the DAB is affected, with powerful local interests sometimes resisting external interventions. Zero or minimal existing infrastructure — roads, power, and support facilities — means that any serious exploration effort would require massive upfront investment in basic amenities.

Economic Potential vs. Ground Realities

The economic stakes are high. The government anticipates a recovery value of over ₹15,000 crore from six identified hydrocarbon-bearing fields in the DAB. In-place reserves could be substantial, potentially contributing significantly to reducing India’s heavy dependence on oil imports (currently over 88% for crude). In the context of global supply disruptions, such as those related to conflicts in West Asia, domestic production gains are critical.

However, experts caution that translating potential into actual output will not be straightforward. Geological studies, fresh bidding rounds, and production-sharing mechanisms must all align. Private players like Essar Oil and Gas have expressed interest, but they underscore the need for policy support, litigation resolution, and land access. ONGC, with prior experience in the area, has proved reserves but could not move to production due to the same multifaceted challenges.

Need for Inclusive Resolution

For the MoU to translate into tangible progress, several steps are imperative. First, sustained dialogue between the Centre, state governments, and all stakeholders — including tribal bodies, landowners, and local communities — is essential to build consensus. Transparent demarcation of boundaries, fair royalty-sharing mechanisms, and mechanisms to safeguard environmental and cultural interests must be prioritised.

Infrastructure development in the Northeast, including better roads and security frameworks, will play a decisive role. The government’s broader push for hydrocarbon exploration in the region, as outlined in documents like the Hydrocarbon Vision 2030, provides a policy backbone, but implementation on the ground demands sensitivity to local aspirations.

while the June 2026 tripartite agreement marks a promising breakthrough after decades of deadlock, the path to actual oil exploration on the Assam-Nagaland boundary is fraught with hurdles. Political will to resolve long-standing disputes, coupled with pragmatic handling of security, environmental, and logistical issues, will determine whether this resource-rich belt becomes a cornerstone of India’s energy security or remains a symbol of unresolved regional complexities. As Naga organisations continue to voice their concerns, the coming months will be critical in shaping the trajectory of this ambitious initiative.

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