The Indian government has enacted the Oilfields (Regulation and Development) Amendment Act, 2025, modifying the existing Oilfields (Regulation and Development) Act, 1948. This amendment was published on March 28, 2025.
The amendment aims to modernize the regulatory framework for oil and natural gas exploration and production, broaden the scope of “mineral oils,” and strengthen oversight to ensure efficient and sustainable development of India’s oilfields.
Key Changes Introduced by the Amendment
The amendment redefines “mineral oils” to encompass a wider range of hydrocarbons, including crude oil, natural gas, petroleum, condensate, coal bed methane, oil shale, shale gas, shale oil, tight gas, tight oil, and gas hydrates. This expanded definition aligns with current industry practices and technological advancements.
The amendment also introduces the term “petroleum lease” to refer to leases granted after the Act’s commencement, replacing the earlier “mining lease” terminology. The amendment empowers the government to regulate the grant, extension, and renewal of petroleum leases, including setting area limits and lease periods. It also includes provisions for dispute resolution, data sharing, and infrastructure sharing among lessees.
A new section, 4A, mandates that all operations related to prospecting, exploration, development, and production of mineral oils must be conducted under a valid petroleum lease.
The amended Act emphasizes environmental protection, safety standards, and the adoption of good international petroleum industry practices. It also promotes the reduction of carbon emissions, and the development of renewable energy projects within oilfield areas.
The amendment introduces stringent penalties for violations, with provisions for adjudication and appeals.
The act ensures that all mining leases and licenses granted before the commencement of this ammendment act, will continue to be valid.
The Oilfields (Regulation and Development) Amendment Act, 2025, is expected to:
- Modernize India’s oil and gas regulatory framework.
- Attract investments in the sector.
- Promote efficient and sustainable development of oilfields.
- Enhance environmental protection and safety standards.
- Strengthen regulatory oversight and ensure compliance.
