The Centre on Monday introduced a Bill in the Lok Sabha to delink petroleum operations from mining, clarify the granting and extension of petroleum leases, and create a new dispute resolution mechanism for the exploration and production sector.
The Oilfields (Regulation and Development) Amendment Bill, 2024, will replace existing laws dating from 1948, which were last amended in 1969. It brings in the concept of ‘petroleum lease’, legally separate from a mining lease. Considering how petroleum extraction will not be considered a mining activity, the proposed Bill will necessitate the creation of a separate category for the appraisal of oil and gas projects for environmental clearances, people in the know said.
“Preparing and clearing Environment Impact Assessment for oil and gas projects is a lengthy endeavour, and often critical projects are stuck because of it. The Bill aims to reduce the complexities in the process without compromising on environmental safeguards. The subsequent rules under the Bill, to be framed by the government, are expected to clarify the issue,” a petroleum ministry official said.
The new Bill also attempts to promote ease of doing business in the exploration space, especially by batting for a larger set of hydrocarbons. Case in point, the Bill introduces the term ‘Mineral Oils’ in place of ‘Oils’, and brings a wide range of mineral oils, including shale oil, gas hydrates, and coal bed methane, under its ambit. The aim is to attract investment in the sector to infuse necessary capital and technology, officials said.
With regards to disputes arising out of petroleum leases or any authorisation granted by the Centre for working of an oilfield, the Bill proposes the government can bring in “alternative dispute resolution methods under any law for the time being in force, in a place within India or outside India”.
On a related note, it calls for granting of petroleum leases on stable terms. In line with the government’s wider push towards decriminalising violations under various business rules, the bill introduces penalties in place of criminal sanctions, calls for adjudication by an adjudicating authority, and appeals against the order of the adjudicating authority.
Green push
It calls for reporting of carbon and greenhouse gas emissions from mineral oil operations and facilitating comprehensive energy projects at oilfields, including renewables such as solar, wind, and others. Towards decarbonising efforts, it has also expanded newer technologies, such as green hydrogen and carbon capture utilisation and storage (CCUS).
The proposed Bill aims to promote and facilitate the adoption of measures for reducing carbon and greenhouse gas emissions and decarbonising operations including but not limited to the use of oilfields for other purposes, such as the production of hydrogen, CCUS, or coal gasification.
The Bill also proposes to promote adequate opportunities for risk mitigation, ensures stability in petroleum exploration, and addresses energy transition issues including next-generation cleaner fuels, the government said.
CHANGES IN THE OFFING
Oilfields (Regulation and Development) Amendment Bill, 2024, bats for new ‘petroleum leases’ to be granted on stable terms
Reporting of carbon emissions, facilitation of solar, wind projects at oilfields
Expands ambit of law to wider range of mineral oils, such as shale oil, gas hydrates
Introduces alternative dispute resolution methods
 "Govt tables Bill in Lok Sabha to delink petroleum operations from mining")
