Outlook Explains | Can the Assam-Nagaland Oil Deal Unlock India's Long-Idle Border Oilfields?

Somewhere along the 512-kilometre boundary between Assam and Nagaland, there are oil wells that have not been touched since 1994. The challenge is neither because the oil ran out nor because the geology changed. But because nobody could agree on whose land it sat under.

For over thirty years, the question of a border kept billions of rupees worth of hydrocarbons locked underground. Last month, the Centre, Assam, and Nagaland signed a tripartite MoU in New Delhi that essentially said — let's stop waiting for the border question to be answered, and drill anyway.

Why the Wells Went Silent

The Assam-Nagaland border disoute follows a 1925 colonial notification, and after Nagaland became India's 16th state in December 1963, the two states almost immediately began disputing where exactly the line ran.

The oil history in the region is older still. As Morung Express reported, oil exploration in the Naga Hills foothills dates back to the 19th century. ONGC extracted approximately 1.02 million metric tonnes of crude at Changpang in Wokha district between 1981 and 1994, before abandoning the site in May 1994 after an ultimatum from the NSCN(IM).

Nagaland then notified its own Petroleum and Natural Gas Regulations in 2012, deepening the regulatory deadlock. On the Assam side of the same border, exploration activities continued uninterrupted. There are now functioning wells just metres away from abandoned rigs on the Nagaland side — an absurd geography that the MoU is now attempting to address.

What the MoU Does and Does Not

As per PIB, the agreement covers six disputed oilfields across more than 1,000 square kilometres of border territory, in the area known as the Naga-Schuppen Belt of the Assam-Arakan Basin. Revenues from hydrocarbons extracted from the disputed areas will be split 50-50 between Assam and Nagaland, regardless of where the final border eventually falls.

Union Home Minister Amit Shah, who witnessed the signing, said current production of around 1,000 to 1,500 barrels per day could rise more than tenfold with improved development, and that a single field could potentially generate over ₹15,000 crore in value.

Assam Chief Minister Himanta Biswa Sarma said on X that Assam alone accounts for nearly 22% of India's crude oil reserves and around 15% of its natural gas reserves, while Nagaland holds significant potential in the Naga-Schuppen Belt. Petroleum Minister Hardeep Singh Puri noted that Nagaland had not produced oil and gas for 31 years, and called this a framework that would provide certainty to investors. Nagaland CM Neiphiu Rio has also confirmed the state is willing to extend cooperation beyond the initial six fields to the whole of Nagaland.

The Concerns Remain

Even as the governments celebrated, resistance was already forming on the ground. East Mojo, in a reported that the Konyak Union has emerged as the most vocal organisation urging caution, calling on the Nagaland government to settle long-pending border disputes and protect customary landowners before any exploration begins. The Konyak Union has also flagged inaccuracies in digital maps that it says misrepresent traditional Konyak boundaries along Assam and Arunachal Pradesh, in a memorandum to Chief Minister Rio dating back to September 2024 that it says has still not been formally answered.

The environmental dimension runs alongside this. East Mojo's earlier analysis of the MoU, documented how tribal communities in parts of Assam had already experienced the loss of land and forests to extractive projects, fuelling anxieties about dispossession. In the ecologically sensitive Dehing Patkai region, proposed hydrocarbon activities had previously drawn opposition from conservationists worried about biodiversity.

Morung Express, in its analysis of what oil has and has not done for the Northeast, pointed out that Assam has extracted crude for over a century and still performs worse on key human development indicators than non-oil-producing Northeastern states like Sikkim and Mizoram — a reminder that resource revenue does not automatically translate into development.

What It Means for India's Energy Picture

India imports roughly 88% of its crude oil requirements, a dependence that the West Asia war that began in February 2026 exposed with painful clarity. The Northeast, with its Assam-Arakan basin geology, has long been recognised as one of the few domestic regions with meaningful untapped hydrocarbon potential. The Centre's Hydrocarbon Vision 2030 for Northeast India, set out in 2016, explicitly targeted doubling the region's oil and gas output. The disputed belt sits squarely inside this prospective geology.

Whether the MoU meaningfully moves the needle on import dependence depends on how much is actually there and how quickly it can be produced. The tenfold production increase Shah cited would still leave the region a relatively small contributor to India's total crude consumption. But in a year when the rupee hit record lows partly because of an oil import bill that spiked with Brent crude, even incremental domestic production gains carry weight.