In a first of its kind instance in oil and gas auctioning, the Petroleum and Natural Gas Ministry has raised a ‘red flag’ over the recent decision of the Nagaland Government floating the Expression of Interest (EoI) for exploration of 11 oil and gas blocks in the North-East State terming it ultra vires of the Constitution.

The Directorate-General of Hydrocarbons (DGH), R. N. Choubey, had noted in his letter to the Petroleum Secretary that the Nagaland Government had, on its own, initiated the process of inviting EoI for 11 oil and gas blocks in the State. The Nagaland Government had issued the Nagaland Petroleum and Natural Gas Regulations on September 22 last year; Nagaland Petroleum and Natural Gas Rules on December 7 and notification for constitution of a Ministerial Group on Petroleum and Natural Gas last year and invitation for EoI on December 18 last year. The last date for receiving EoI was January 7, 2013.

“It appears that this action of the Nagaland Government is ‘ultra vires’ of the Constitution. It is, therefore, requested that the Petroleum Ministry, in consultation with the Ministry of Home Affairs, take suitable steps to advise the Nagaland Government to rescind the entire process,’’ Mr. Choubey’s letter states.

It states that the Nagaland Government claimed to derive its powers for such an exercise under Article 371-A (1) (a) of the Constitution, followed by a Legislative Assembly resolution on July 26, 2010. It also refers to a Central Government reply in Lok Sabha to the effect that the Nagaland Government has the power to frame rules for governing matters relating to Petroleum and Natural Gas within the territory of Nagaland.

It may be mentioned that the Petroleum Ministry had awarded two exploration blocks in Nagaland under the New Exploration Licensing Policy regime Round III and NELP IV. However, there is no progress because of non-permission for carrying out exploration work in these blocks by the State Government.

It is learnt that the Petroleum Ministry had already written to the Home Ministry asking it to advise the Nagaland Government to restrain from carrying out any further action in the matter as it had no jurisdiction to allocate or auction oil and gas blocks, a right reserved with the Petroleum Ministry of the Central Government.

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