Parliament session: Oilfields development bill passed in Lok Sabha

Calls for de-linking petroleum operations from mining, renewable projects at oilfields

The Oilfields (Regulation and Development) Amendment Bill, 2024, which aims 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, was passed in the Lok Sabha on Wednesday.

  Passed in the upper house back in December, the amendment bill will replace existing laws dating from 1948, which were last amended in 1969, and brings in the concept of a ‘petroleum lease’, to be legally separate from a mining lease.

  “By virtue of the fact that we are going to rely on conventional energy for some time, we need to step up our exploration and production activities. Today’s successful passage of the bill will be a constructive and positive step in this direction,” Petroleum Minister Hardeep Singh Puri said. The bill also does not alter the existing level playing field and offers no preference to either the private or the public sector, the minister said. 

Since both crude oil and natural gas are found in the pore spaces of subsurface rocks and are extracted by drilling, the delinking of terms like ‘mine’, ‘quarried’, or ‘excavated’ as referred to in the current Act will remove ambiguity and introduce ease of doing business into the sector, which is more technologically driven, Puri has stressed. More ease in exploration would be made possible by incorporating a larger set of hydrocarbons in the new bill. Case in point, it introduces the term ‘mineral oils’ in place of ‘oils’, and brings a wide range of mineral oils under its ambit.

 

With regard to disputes arising out of petroleum leases or any authorisation granted by the central government for the working of an oilfield, the bill proposes that 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". Granting of petroleum leases on stable terms has also been mentioned in the bill. 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 allows appeals against the order of the adjudicating authority.