Key Highlights
- Transforms the antiquated oil‑and‑gas statutes to mirror contemporary market dynamics.
- Switches contract allocation from a Production‑Sharing model to a Revenue‑Sharing framework.
- Introduces a unified petroleum lease, curtails licensing multiplicity, and eases compliance.
- Encourages cutting‑edge technologies such as CCUS and green‑hydrogen projects.
- Provides small‑scale players with shared‑infrastructure avenues and safeguards state royalties.
Detailed Insights
The Lok Sabha endorsed the Oilfield (Regulatory and Development) Amendment Bill, 2024 on 12 March 2025, following the Rajya Sabha’s consent on 3 December 2024. The legislation seeks to rejuvenate India’s upstream sector by dismantling legacy provisions that hinder investment and production. Central to the reform is the migration from a Production‑Sharing Contract (PSC) to a Revenue‑Sharing Contract (RSC), a change intended to simplify revenue attribution and grant investors clearer fiscal expectations.
A single‑permit mechanism replaces the erstwhile web of licenses, consolidating rights to explore and produce all hydrocarbon classes under one Petroleum Lease. The bill also creates a dedicated dispute‑resolution body to expedite grievance handling for domestic and foreign stakeholders, accompanied by a stricter penalty regime—₹25 lakh for a first‑time breach and up to ₹10 lakh per day for persistent violations.
By opening previously designated No‑Go zones, endorsing carbon‑capture‑utilisation‑sequestration (CCUS) and green‑hydrogen ventures, and enabling infrastructure sharing among smaller operators, the act aspires to unlock dormant reserves, improve the ease of doing business, and fortify energy security ahead of the 2047 “Viksit Bharat” milestone.
Key Concepts
- Revenue‑Sharing Contract (RSC): An arrangement where the contractor retains gross production and remits a pre‑agreed share of revenue to the government.
- Petroleum Lease: A singular authorization that amalgamates exploration, drilling, and production rights for all hydrocarbon types on a specified block.
- Carbon Capture Utilisation and Sequestration (CCUS): A suite of technologies designed to trap CO₂ emissions from industrial processes and either repurpose or store them underground.
- Discovered Small Fields Policy (2015): A government scheme that supports the development of marginal oil and gas fields through incentives and shared infrastructure.