Lok Sabha passes Oilfield Amendment Bill to boost energy sector and investor confidence

The Lok Sabha on Wednesday passed the Oilfield (Regulatory and Development) Amendment Bill, 2024, marking a significant step in reforming Indias oil and gas sector. The Bill, which was earlier cleared by the Rajya Sabha on 3 December 2024, aims to simplify regulations, attract investments, and enhance exploration and production capabilities in the country.

The Amendment Bill seeks to do away with the historical erroneous practice of putting mining and petroleum operations in the same bucket. It also introduces a single permit system namely, petroleum leases, which will substitute the extant system which requires the Contractors to take multiple licenses for carrying out various types of activities for different types of hydrocarbons. The Bill will facilitate development of comprehensive energy projects and adoption of new technologies like carbon capture utilization and sequestration (CCUS), green hydrogen etc.

The Bill also aims to resolve one of the biggest grievances of global oil companies interested in investing in India by providing stability in operations, both in terms of tenure of the lease and conditions therein. It emphasizes efficient alternate dispute resolution mechanisms which will ensure disputes can be resolved in a timely, fair and cost-effective manner.

To promote enforcement of the provisions of the Act, penalty has been increased to 25 lakh rupees and upto 10 lakh per day for continuing infraction so that they have deterrent effect. To make the system effective and expeditious, the Bill creates an adjudication authority and an appellate mechanism for levy of penalties.

Minister Hardeep Singh Puri emphasized that the Bill will enhance ease of doing business, support small oil field operators, and unlock India's hydrocarbon potential, while ensuring that States retain their rights over petroleum leases and revenue collection.

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