• The Rajya Sabha passed the Oilfields (Regulation and Development) Amendment Bill, 2024 on December 3.

• It seeks to amend existing law governing exploration and production of oil and gas, and delink petroleum operations from mining operations to boost investment in the sector.

• The Bill, introduced in the Rajya Sabha in August this year, was passed by a voice vote.

• Policy stability, dispute resolution and sharing of infrastructure, especially for small players are new provisions in the Bill.

• Oil Minister Hardeep Singh Puri said India currently produces about 30 million metric tonnes (MMT) of crude oil and 36.5 billion cubic metres of natural gas annually. As against this production, the country consumes 235 MMT of petroleum products and 68 billion cubic metres of natural gas. 

Why the govt brings in amendments to the original Act?

• Originally, oilfields, mines and minerals were comprehensively regulated together through the Mines and Minerals (Regulation and Development) Act, 1948.

• Subsequently, in 1957, the Mines and Minerals (Development and Regulation) Act, 1957 was enacted for the development and regulation of mines and minerals under the control of the Union. 

• The original Act of 1948 was also renamed as the Oilfields (Regulation and Development) Act, 1948  and made applicable to mineral oils only.

• The Act, which provides for a very different global energy context, requires to be amended to meet the needs and aspirations of the country for energy access, energy security and energy affordability. 

• Further, there is an urgent and pressing need to increase domestic production of oil and gas to meet the rising demand for energy and reduce import dependence of the country. 

• In order to unlock valuable mineral oil resources, it is necessary to attract investment in the sector to infuse necessary capital and technology for expediting petroleum operations in the country by creating an investor friendly environment that promotes ease of doing business, prospects for exploration, development and production of all types of hydrocarbons, ensures stability, promotes adequate opportunities for risk mitigation, addresses energy transition issues including next-generation cleaner fuels and provides for a robust enforcement mechanism for ensuring compliance of the provisions of the said Act.

Key provisions of the Bill:

• Delinking of petroleum operations from mining operations.

• Broadening the scope of the expression “mineral oils”.

• Introducing the concept of “petroleum lease”.

• Granting lease on stable terms.

• Strengthening petroleum operations through rules framed for governing various functional aspects, such as, grants of leases or licences, their extension or renewal, sharing of production and processing facilities including infrastructure and safety at oilfields.

• Providing for efficacious dispute resolution.

• Decriminalising the provisions of the said Act by introducing penalties, adjudication by an adjudicating authority and appeal as against the order of adjudicating authority.

• Creating an environment for facilitating energy transition by enabling development of comprehensive energy projects for harnessing wind and solar energy along with mineral oils at oilfields.

Manorama Yearbook app is now available on Google Play Store and iOS App Store