Govt amends petroleum, natural gas rules for ease of doing business

The Centre has amended the Petroleum and Natural Gas Rules, 2025 to ease exploration and production operations, allow longer leases, speed up approvals and raise penalties for violations

Hardeep Singh Puri, Hardeep Singh, Hardeep — India continues to strengthen the infrastructure for domestic exploration and production of hydrocarbons as we move towards achieving energy security, said Hardeep Singh Puri, Union minister of petroleum and natural gas, in a post on social media pla

2 min read Last Updated : Dec 13 2025 | 12:55 AM IST

The government has amended the Petroleum and Natural Gas Rules, 2025 to offer ease of business and operations in the country’s exploration and production (E&P) sector.

“India continues to strengthen the infrastructure for domestic exploration and production of hydrocarbons as we move towards achieving energy security,” said Hardeep Singh Puri, Union minister of petroleum and natural gas, in a post on X.

Under the new rules, the lessees would have the right to carry out all types of mineral oil operations under one petroleum lease, and may undertake decarbonisation and comprehensive energy projects at oilfields.

The government would allow long-term leases of up to 30 years, and might extend the lease up to the economic life of the field, allowing the lessee to make planned investment decision. Meanwhile, the application for grant of petroleum lease would be decided within 180 days.

For contractual disputes, the amendments state that the seat of arbitration involving only Indian companies would be New Delhi while in case of a foreign company, as defined in Companies Act, a neutral seat of arbitration may be opted.

The government has enhanced penalties to ₹25 lakh, and in case of continuation of contravention to ₹10 lakh per day. For uniformity and ease of administration, lease formats have also been introduced. The government has now mandated submission of a reduction plan comprising time-bound targets and milestones to achieve zero gas flaring and reduction of greenhouse gas emissions.

The lessees should make an annual declaration to the Indian government of the installed, utilised, and excess capacity of infrastructure facilities they own, which would permit other lessees to jointly develop or share these facilities by mutual agreement, said Puri.