The report called for a solution by 2018. But it took another  eight years the Centre, Assam, and Nagaland to reach an agreement, paving the way for both state and private players to drill in the area. 

The pact, signed in early June this year, is an enabler, explained an official of a private sector explorer that has blocks overlapping DAB. While blocks have been awarded in the past in the disputed area, petroleum exploration licences were not given by the Nagaland government, the official said. 

An urgency to exploit discovered areas arises amid India’s declining domestic oil production and surging oil use — a 90 per cent import dependence is a liability in times of a war in West Asia. The tripartite pact, with the Union home ministry as the referee, addresses two issues, which had stopped explorers from accessing one of India’s most-promising oil-bearing areas since the early 1990s. First, a dispute between Assam and Nagaland on the land border; second, the complexities of Nagaland’s Article 371A, which grants special rights over land and resources, and which was the biggest bugbear for developing oil and mineral deposits in the region, two officials from as many state-run explorers said. “It (DAB) has very high potential,” said Sushma Rawat, former exploration director of Oil and Natural Gas Corporation (ONGC), who has extensive experience in the area. ONGC already had proved the presence of oil there in the late 1980s. But then, because of political and other social issues around that area, the operations ceased, said Rawat. 

She said that once blocks in the now-settled DAB are demarcated, explorers need to conduct geological studies before commencing drilling. ONGC has drilled wells in the DAB, but they were not put into production. 

“We are evaluating this area, and in case there is any fresh bidding… we will actively look at these opportunities,” said Pankaj Kalra, chief executive officer (CEO), Essar Oil and Gas. 

The pact is only a beginning. The DAB and other areas in Nagaland present steep environmental, infrastructural, and security hurdles. 

“It (DAB) is a very prolific basin which was infested with insurgency. And as a result, for several decades, the most potential areas were like a no-go area,” said Ashish Agarwal, CEO of Seros Energy. “So, now the government is taking a lot of these steps to expedite infrastructure development, resolve litigation, obtain forest clearances, have access to land and a policy intervention to simplify things,” Agarwal said. 

Some experts estimate the size of the reserves in the DAB, a part of the Assam-Arakan basin, the less explored of the two basins (the other being the Upper Assam Shelf) in the Northeast belt, to exceed that of the entire northeastern region. The Upper Assam Shelf and the Assam-Arakan fold belt are two distinct geological regions of the Assam-Arakan basin, covering approximately 56,000 sq km and 60,000 sq km, respectively. While the Upper Assam Shelf is about 90 per cent explored and drives current oil and gas production, only 10 per cent of the fold belt has been explored. 

The major part of the fold belt falls between the prolific hydrocarbon-producing regions of Bangladesh and Myanmar. In both these countries, gas is the main constituent of hydrocarbons produced, and oil production is very low. Huge gas potential is envisaged from unexplored Assam and Assam-Arakan fold belt regions. 

Other forecasts come lower. Estimates of inplace reserves (reserves that are available, but only a portion can be profitably extracted) by ONGC and other developers in the DAB is as much as 250 million barrels — with a recovery ratio of 30-40 per cent, industry officials said. That is sufficient to meet India’s fuel demand for three weeks, according to calculations based on oil ministry data. The inplace reserves in the DAB account for 15 per cent of Northeast’s total reserves, according to one estimate.

The government said that it expects a recovery value of over ₹15,000 crore from the six identified hydrocarbon-bearing fields in the DAB.  

Irrespective of how much can be profitably extracted, getting to these deposits is no easy task, five experts who have worked in the area said, adding that you have to negotiate tough terrain, thick forests, zero infrastructure and several encroachments. There are topography and logistic issues, said Pankaj Goswami, former director-operations, Oil India. ”You need to take heavy drilling equipment across hilly areas,” Goswami said. 

The DAB is divided into six sectors. Out of these six sectors, four sectors — A, B, C and D — fall in Golaghat district of Assam side and contain reserve forests like Rengma Reserve Forest, South Nambor Reserve Forest, and Doyang Reserve Forest. A considerable part of these reserve forests and government lands is under encroachment, said Biplab Biswas and Sachin Rajmurti, researchers from Mahatma Gandhi University in Meghalaya, in a note in May. 

Around 10,500-11,000 bighas of land, or 3 per cent of the DAB, were encroached upon by people so far in the reserve forests and government land areas, according to Nagaland government data last year. While in Assam, 1 bigha equals to 0.33 acre, in Nagaland it is 0.62 acre. 

The locals (in Nagaland) are very powerful. They did not allow outsiders to work in those areas in the past, a senior official from a state explorer said. 

For example, last July/August, the governments of Nagaland and Assam undertook a joint eviction drive to clear alleged encroachments and remove illegal immigrants on nearly 1,500 hectares of forest land in Golaghat district, leading to tension in the area.