Are there crude oil deposits in the jungles of the northeastern state of Nagaland?

That is what India's Oil and Natural Gas Company and Canada-based Canoro Resources will soon scout for.

The Nagaland government has signed agreements with Canoro Resources and ONGC to look for oil deposits in the jungles, the state Industry and Commerce Minister Khekhiho Zhimomi said.

Nagaland has the potential to yield some 600 million tones of crude oil, according to preliminary government estimates.

"Nagaland is literally sitting on a multi-million dollar oil reserve. The state's economy would definitely witness a massive turnaround if oil is struck," the minister pointed out.

ONGC, India's premier oil exploration firm, began exploration work in Nagaland in 1994 but had to withdraw its operations following threats from the separatist Isak-Muivah faction of the National Socialist Council of Nagaland and several other tribal groups.

But Minister Zhimomi said despite being geographically located in one of the most prospective areas, there has been virtually no exploration activity in Nagaland for over 12 years.

Nagaland is also rich in coal, limestone, nickel, cobalt, chromium, magnetite, copper, zinc and platinum, besides marble and granite.

The government recently adopted the 'minor minerals policy' to make exploration work possible in the region.

A violent insurgency dating back to India's Independence in 1947 has so far claimed over 25,000 people lives in Nagaland, which borders Myanmar.