Oil and Natural Gas Corporation and Hindustan Petroleum Corporation Ltd plan to explore the sub-Himalayan region of Uttar Pradesh for oil and natural gas.
The field operations are on in the sub-Himalayan terai region stretching from the Gorakhpur district in eastern UP to Bijnore district in western UP.
"The field operations are underway and the prospects seem good for the discovery of oil and natural gas," UP secretary, industries, mining and geology, M V S Rami Reddy, told Business Standard.
The two companies were given prospecting licences sometime back, he informed. The licence allows the licence holder to undertake mineral substance prospecting works within a specific area.
"The two companies are undertaking research work, root mapping, geological survey and Geographic Information System survey to discover the fossil fuel.
"Some other agencies are also working in close coordination with them," Reddy added.
The state government is likely to hold a meeting with the licence holders next month to discuss the development so far and analyse the results.
Besides, the state government had also issued three-year prospecting licences to De Beers to look for diamond, platinum and gold in the Bundelkhand region comprising Lalitpur, Jhansi and Sonebhadra districts.
"The first round of exploration has already been completed in the Lalitpur district," he said.
Meanwhile, the state mining department is eyeing a turnover of Rs 525 crore (Rs 5.25 billion), up from Rs 400 crore (Rs 4 billion) last fiscal.
"Of the total Rs 525 crore, Rs 125 crore (Rs 1.25 billion) is likely to come from coal mining royalties alone," Reddy said.
The state of UP has about 4,000 mines of coal, silica, bauxite and granite -- mostly in the Bundelkhand region -- and private miners are allowed to extract minerals for royalties.