In these uncertain and challenging times, I wonder if the time is right to bring up (or even revisit) the story of crude oil exploration and production in Nagaland which today lies in a limbo mired with complications over who owns the ‘land, mineral and its resources’. Is it the Central or State Government, local community or the individual land owner? While our leaders, law and policy decision makers will definitely come out with workable solutions to this complex geo-political issue, nobody really knows how much longer it will take for the dust to settle…maybe a few weeks, months, years or even a lifetime. I (for one) think that this is an opportune time to reflect on what we may be losing out in this long wait. Talks, political negotiations, dialogues, etc. with the Central Government will continue. However, I strongly feel that the State and the present generation should not be deprived of economic activities and benefits that can accrue if the process of industrialisation takes place in Nagaland. Towards this, the article is presented from the viewpoint of a concerned Naga working outside, keeping in perspective the oil and gas industry.
In an earlier issue, during the initial outbreak of the Covid-19 pandemic, I had shared concerns over Naga returnees vs. the present employment scenario which was published in the third week of June,2020 in major local dailies. This time around, I wish to highlight the need for all of us to start thinking differently in terms of economic activities that can usher in big industries (such as the oil and gas industry) to address the issues of unemployment that has today become an area of concern for both the government, society and parents alike.
While all of us are happy and excited about the fast track projects like the Railway Project, Four-lane Road and implementation of Smart city concepts coming up very soon; I see a not–so-rosy picture when the present scenario is looked from a perspective where all such good things exist without any big industry coming up in the State. The new normal coupled with the ‘Internet of Things’ (IoT) will surely connect us better to the outside world (the internet does not distinguish between rural or urban, young or old, gender, educated or unemployed). Yet, we have more reasons to worry because to sustain our livelihood we need sustainable long term economic activities that generates regular income. We need to differentiate between State development activities vs. economic activities. It is time we shift our attention on initiatives that will bring about long term gainful engagement and employment. After all, what do we gain if we are able to drive on good roads that take us right up to our doorsteps? What will happen when the railways bring in more finished goods and products from outside that are much cheaper compared to locally available equivalent products? What about the influx of outsiders and tourists who will come in contact with our people living deep inside the rural villages.
While it is an undeniable fact that crude oil, christened as ‘black liquid gold’ fuels the economy because when converted into finished petroleum products, most of our basic needs can be met. Yet the oil story of Nagaland is different. Though the presence of hydrocarbon (oil & gas) is confirmed, nobody knows and can say what or how much exactly lies beneath us. It is only estimates and probabilities on which we are making assumptions. The true picture can emerge only when we go for oil exploration activities in a systematic manner by bringing in reputed oil exploration and production companies.
We Nagas have a perceived notion that we have rich oil reserve deposits and that we only need to drill. However, we also need to know and appreciate that investing in the oil business is a very high risk high investment business. There are many phases that an oil and gas (E&P) company must go through before crude oil can be extracted and produced. The life cycle of oil and gas takes much longer than what we think.
Generally, it takes from 3-4 years to even 10 years to explore and evaluate the commerciality aspect of an oil discovery. This is before the company can even invest to develop the reserve for maximising recovery and profits. At times, it may even take longer than expected only to find out that there are no deposits beneath.
The business of oil exploration and development can accrue enormous benefits such as industry, employment, infrastructure developments and financial benefits to the State and its people. Therefore the discovery of oil in any location, is greeted with great optimism and efforts are doubled to extract the mineral. However, in the case of Nagaland, despite our claim over presence of oil deposits, the current scenario in Nagaland is quite the reverse and grim since we have to rely fully on our neighbouring state for supply of essential petroleum products let alone other basic essential commodities. We must appreciate the fact that Assam State commands such a position today in the business of oil & gas (from upstream to downstream) because they are almost a hundred years ahead of us in the business. They went early for exploration activities for why they are reaping the benefits today. As for us, we will have to wait and depend on other States until the time our natural resources are explored and extracted. Imagine those Covid-19 restriction days or even the closure of national highway due to road-widening activities lately, the hardship caused due to non-availability and short supply of petroleum, gas and essential commodities cannot be imagined.
If one looks at the way the world economy is moving towards, the time is not very far off when crude oil will slowly loose its relevance. The 21st century is expected to witness a major shift in energy sources with gradual decline in the usage of fossil fuels (like coal and oil) for more efficient fossil fuels such as natural gas. Advances in biotechnologies will leverage the increased usage of biomass fuels while wind and solar will also account for a notable share of energy sources. A new transition is likely to be the usage of hydrogen, mainly for fuel cell vehicles, small energy generators and other portable energy devices. In fact, the central government aims to make India a 100-percent electric vehicle nation by 2030 as announced in the recent release of the Union Budget for 2021-22. It focuses on capturing the emerging energy transition trends - from Renewables to Hydrogen.
An often quoted adage goes… “The stone age did not end because the world ran out of stones, and the oil age will not end because we run out of oil.” Likewise, the age of fossil fuel will disappear not because we ran out of oil reserves but because renewable energy (with better and advanced technologies) make them more cost-effective to meet humanity’s changing needs. Therefore the challenge is- Do we preserve the black liquid gold and risk the chances of losing its worth and relevance tomorrow or will it be a wiser to accelerate the need for oil exploration now so that we can produce and hand over to posterity a better and brighter Nagaland.
A ‘sense of urgency’ for oil exploration to happen in Nagaland is the need of the hour to make a realistic assessment of the presence of hydrocarbon. Oil exploration in simple terms can be better understood as taking an x-ray or MRI. Until we do it, we can only assume. Likewise, only when geological and seismic surveys are carried out and data is collected and interpreted scientifically, can we do a proper appraisal and assessment of the hydrocarbon reserves. Though Champang oilfied in Wokha district, produced until the early 90’s; we do not know whether the oilfield still retains its basic reservoir characteristics over the passage of time. As regards other districts in Nagaland, we are not aware of any systematic seismic survey being carried out.
It will only serve to the advantage of the State Government and people of Nagaland if reputed oil & gas companies are allowed to come and carry out oil exploration activities covering large tracks of unexplored areas in our State. We will get to know exactly what type of oil reserves we have… whether proven, possible or probable reserves. Such an exploration campaign will provide us with vital geological data and information based on which we can reaffirm the presence of crude oil across different districts. Bustling economic activities will take place if the Government decides to get into the next phase of development and production of crude oil after ascertaining the same. Infrastructure development in the form of roads, bridges, manpower engagements (skilled, semi-skilled and unskilled) and service contracts, etc. will all come along.
As reiterated, investment in the oil and gas business is a very capital intensive with very high risks and therefore needs the support of Central Government for its funding and sustenance. The sooner we get in, the earlier we can reap the benefits. Any further delay in waiting may cost us dearly. With everyone’s support, we need to push forward the urgency for early oil exploration in Nagaland so that State development activities go hand in hand with economic activities. TOO EARLY OR TOO LATE.
Meyabi A.Niphi
(The writer is based out of Nagaland and works in Oil India Limited,Duliajan,Assam)