ONGC gets NSCN extortion threat

Guwahati: Oil and Natural Gas Corporation (ONGC), India's largest oil producer, has received extortion demand from outlawed separatist militants National Socialist Council of Nagaland (NSCN) before the state-run firm begins operations in the state.

ONGC's Nazira office in Assam on May 8 received two letters signed by Lt Col Angpa, Secretary, Konyak Region, NSCN demanding Rs three crore, company sources said.

The extortion demand made by NSCN came within days of ONGC getting Petroleum Exploration License (PEL) from the state government for two blocks the company had won under New Exploration Licensing Policy (NELP).

Sources said the extortion demand on the letterhead of Office of the Chairman Konyk Region, NSCN stated that the ONGC may begin work only after "fulfillment of our demand."

ONGC, which had in January received an extortion demand of Rs 500 crore from ULFA, has already informed the petroleum ministry about the latest threat.

State-owned Oil India Ltd had in 2001 shut operations in Arunachal Pradesh after extortion demands from NSCN. ONGC is, however, not unnerved by the extortion threat and plans to go ahead with exploring in blocks in Nagaland.

Sources also said that ONGC as a responsible corporate has proposed to sign an MoU with the state government spelling out the local area development activities including payment of additional royalty to Nagaland government, offering of minority stake in the blocks to state government companies, recruitment of locals and scholarships to Naga students.

ONGC has already paid a royalty of Rs 33.83 crore against the crude oil extracted from Changpang field in Nagaland. However, as a goodwill gensture, the company shall further pay one time goodwill grant of Rs 67 lakh to Nagaland.

It has also proposed to pay a special grant (add-on-royalty) at the rate of two per cent over and above the applicable rate of royalty to be paid to the Nagaland government on the crude oil produced from the state.

After one year of commencement of normal and sustainable operations, ONGC planned to recruit educated unemployed Naga youths and give one scholarship each in different engineering disciplines, they added.