Assam Cabinet approves Hydrocarbon Policy 2026 to boost exploration in untapped areas

The Assam Cabinet has approved the Assam Hydrocarbon Exploration, Production and Upstream Ecosystem Development Policy, 2026, aimed at encouraging exploration for oil and natural gas in areas where hydrocarbons have not yet been discovered.

Chief Minister Himanta Biswa Sarma said the policy was necessitated by the lack of significant new oil discoveries in the state over the past several years. Exploration activities, he said, have largely remained concentrated around existing oil fields, while companies have been reluctant to venture into new areas because of the financial risks associated with unsuccessful drilling.

“The primary reason is the high degree of uncertainty involved in exploration. If a company drills in a new area and does not discover oil or gas, it can suffer substantial financial losses,” Sarma said.

The Chief Minister said several areas of Upper Assam are believed to have considerable hydrocarbon potential but have remained underexplored because of the risks involved. He expressed hope that the new policy would facilitate the discovery of fresh oil and natural gas reserves and help prevent a decline in Assam’s oil production over the next decade.

Assam currently produces around 4 million metric tonnes of oil annually, according to Sarma. He said that without new discoveries, increasing production would become increasingly difficult and output could decline in the coming years.

Under the policy, the state government will provide incentives to companies undertaking exploration in new and potentially high-risk areas. The measures will include support for setting up new drilling rigs and bringing modern exploration equipment into the state.

Sarma said companies investing in new exploration rigs could receive GST-related exemptions. The government will also provide concessions on land required for exploration activities.

“If a company requires land for exploration, the government will not charge the initial premium if no oil or gas is discovered. If hydrocarbons are discovered, the applicable premium can then be collected,” he said.

The policy is intended to encourage both public sector companies, including Oil India and ONGC, and private players to undertake exploration in new areas. Sarma cited locations such as Biswanath Chariali and Dhemaji as potential areas for exploration under the new framework.

The Chief Minister said the policy seeks to attract investment, expand exploration activity and support the long-term sustainability of Assam’s oil and natural gas production.