Rajya Sabha passes bill to boost investment in oil and gas exploration

The Oilfields (Regulation and Development) Amendment Bill, 2024, introduced in the Rajya Sabha in August this year, was passed by a voice vote. Replying to the debate on the bill, Oil Minister Hardeep Singh Puri said that the oil and gas sector involves high investment and long gestation periods. “We need the oil and gas sector for 20 more years. We need to bring this legislation here to provide a win-win confidence not only to our own operators but also to foreign investors so that they can come and do business here with a view to benefiting everyone,” Puri said. He said policy stability, dispute resolution and sharing of infrastructure, especially for small players, are new provisions in the bill. He also explained the point of helium raised by members, saying that mineral oils are naturally occurring hydrocarbons and thus helium is not a hydrocarbon.

Several opposition members also suggested that the bill be sent to a standing committee for further scrutiny. Puri further said, “We want to ensure that investors will have more confidence to come here unlike the dull period between 2006 and 2014. There will be one lease and one license. If there is a dispute, then for dispute management there will be predictability and stability.”  The bill “aims to ensure policy stability for oil and gas producers and allow international arbitration and extend lease periods” over areas for producing fossil fuels, he said.

It aims to decriminalize some of the provisions of the original 1948 law by introducing “penalties, adjudication by an adjudicating authority, and appeal as against the order of the adjudicating authority.” The bill proposes to introduce ‘petroleum lease’ and expands the definition of mineral oils to include crude oil, natural gas, petroleum, condensate, coal bed methane, oil shale, shale gas, shale oil, tight gas, tight oil and gas hydrate. This is with a view to raising domestic output and cutting reliance on imports.

India imports more than 85 percent of its crude oil needs and about half of its natural gas requirement.