Locals have urged the government to resume petroleum exploration at Bahune 9 in Morang district. A team of lawmakers submitted a memorandum containing their demand to the Industry Ministry through Morang’s chief district officer Ganesh Raj Karki on Wednesday.
In 1989, a Netherlands-based company had been contracted to dig for oil in Bahune. The company abandoned drilling after going to a depth of 3,520 metres.
“After that the government had signed an agreement with some American and Canadian companies to resume drilling, but they did not show up either,” said Sarvajit Prasad Mahato, director general of the Department of Mines and Geology.
“We have written to all the companies,” he said. “If they do not start work, the government will terminate the agreements with them.”
“As most of the companies have less than a year remaining in their contracts, we are not in a position to wait for them. We are confident that there are petroleum deposits at Bahune, but nothing is being done.”
The government has divided the Tarai and the Siwalik hills into 10 “exploration blocks” of 5,000 sq km each as being potential oil fields. It had awarded Block 10 situated in Biratnagar to US-based BBB Champion and Blocks 8 and 9 in Janakpur and Rajbiraj to EABG in 2012. After around two years of their being awarded the exploration licences, BBB Champion disappeared from radar while EABG asked for its permit to be cancelled, said officials of the Department of Mines and Geology. EABG too dropped out of sight after the government asked it to fulfil its liabilities.
The slow progress on the exploration front has provoked the Ministry of Industry to issue strongly worded warnings, and it has even been considering terminating the permits held by the four oil companies.
The history of petroleum exploration in Nepal is not so long. It gained momentum in the late 1990s when Houston-based Texana received a contract to drill for oil in two blocks. Texana won the bid for Blocks 3 and 5 (in Banke and Chitwan) and entered into an agreement with the government in December 1998.
Six years later, the country’s petroleum exploration bid was further bolstered when Cairn received a licence to explore five more blocks — Blocks 1, 2, 4, 6 and 7 (Dhangadhi, Karnali, Lumbini, Birgunj and Malangawa respectively).
However, with the political situation worsening (the Maoist conflict being the prime reason), both Texana and Cairn were forced to remain inactive till around 2009.
This year, the government has allocated a budget of Rs 500,000 to fence the area at Bahune and hired two security guards to look after it.