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Canadian, Indian firms to hunt crude in Nagaland

Govt estimates that the predominantly Christian state has the potential to yield 600 million tonnes of crude oil.

business Updated: Apr 11, 2007 17:11 IST

A Canadian company and an Indian exploration firm will soon begin looking for crude oil in the jungles of Nagaland in the northeast, a state haunted by decades of insurgency.

Agreements with Canoro Resources Ltd of Canada and Oil and the state-owned Oil and Natural Gas Corp (ONGC) have been signed and the calendar of activities will start soon, Nagaland Industry and Commerce Minister Khekhiho Zhimomi said.

The predominantly Christian state of two million has the potential to yield some 600 million tones of crude oil, according to preliminary government estimates. "Nagaland is literally sitting on a multi-million dollar oil reserve. The state's economy would definitely witness a massive turnaround if oil is struck," the minister told IANS.

ONGC, India's premier oil exploration firm, began exploration work in Nagaland in 1994 but had to withdraw its operations following threats from the separatist Isak-Muivah faction of the National Socialist Council of Nagaland (NSCN-IM) and several other tribal groups. "We have the full support of the local people this time while executing the agreement with the ONGC. We hope there should be no problems now," Zhimomi said.

A similar deal was signed between the local government and Canoro. "In northeast India, we believe the thrust belt running through the state of Nagaland to be a highly prospective area to explore for hydrocarbon deposits," Les Kondratoff, president of Canoro Resources Ltd, said in a statement from Canada.

Canoro has been engaged in exploration work in the oil-rich northeastern part of India since the past decade. The Canadian firm is now part of the Kharshing oilfield in Arunachal Pradesh that they began exploring in 1995. "Despite being geographically located in one of the most prospective areas, there has been virtually no exploration activity in Nagaland for over 12 years and limited activity prior to that," the Canoro statement said.

"Nagaland's geology is very similar to the thrusting and folding found in the foothills of the Rocky Mountains of Alberta, an area very familiar to Canoro's management and technical team," it added.

Despite a narrow industrial base and poor economic conditions, the tribal Nagas until recently refused the vast natural resources to be tapped.

"There is no point in not letting the resources be tapped. By striking oil, we would not only be earning revenue, but at the same time such ventures would ease the spiralling unemployment problem in the state," the minister said.

Nagaland is also rich in coal, limestone, nickel, cobalt, chromium, magnetite, copper, zinc and platinum, besides marble and granite. The government recently adopted the 'minor minerals policy' to make exploration work possible in the region.

A violent insurgency dating back to India's independence in 1947 has claimed over 25,000 people lives in Nagaland, which borders Myanmar.