Guwahati: The Assam Cabinet has approved the Assam Hydrocarbon Exploration, Production and Upstream Ecosystem Development Policy, 2026, aimed at encouraging oil and natural gas exploration in underexplored and high-risk areas of the state.
Chief Minister Himanta Biswa Sarma said the policy was necessitated by the absence of significant new oil discoveries in Assam in recent 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 remain underexplored because of the risks involved.
He expressed hope that the new policy would encourage exploration and help discover fresh reserves of oil and natural gas, while preventing 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 new policy, the state government will provide incentives to companies undertaking exploration in new and potentially high-risk areas. The measures include support for setting up new drilling rigs and bringing modern exploration equipment into Assam.
Sarma said companies investing in new exploration rigs could receive GST-related exemptions. The government will also offer 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 seeks to encourage both public sector companies, including Oil India and ONGC, and private players to undertake exploration in new areas.
Sarma cited areas such as Biswanath Chariali and Dhemaji as potential locations for exploration under the new framework.
The Chief Minister said the policy was aimed at attracting investment, expanding exploration activity and supporting the long-term sustainability of Assam’s oil and natural gas production.