Rajya Sabha Endorses Changes to Oilfields Act, Puri Celebrates 'Historic Development'
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New Delhi, Dec 3 (NationPress) The Rajya Sabha on Tuesday approved significant revisions to the Oilfields (Regulation and Development) Act of 1948, aimed at enhancing the ease of business and accelerating the evolution of India’s burgeoning energy sector.
Minister for Petroleum and Natural Gas Hardeep Singh Puri referred to this as “a historic leap into the future,” stating: “The monumental amendments introduced will further fortify and advance India’s energy sector under the guidance of Prime Minister Narendra Modi, ensuring policy consistency, international arbitration, extended lease durations, and more.”
Given that petroleum (crude oil/natural gas) exists in the pore spaces of subterranean rocks and is extracted through drilling, the removal of terminology such as ‘mine’, ‘quarried’, or ‘excavated’ as defined in the current Act will eliminate confusion and promote Ease of Doing Business in this technology-driven sector, the minister explained.
The term ‘mineral oil’ is conventionally associated with natural gas and petroleum.
As unconventional hydrocarbon resources have been discovered and developed, there is a need to revise the definitions to align with contemporary interpretations, the minister emphasized.
Changes to the definition of a mining lease will clarify that leases granted before the implementation of the Oilfields (Regulation and Development) Amendment Act will continue to be referred to as mining leases. Following this, the use of that terminology will cease, and the term petroleum lease as defined in clause (f) will take precedence.
To attract investors for comprehensive development of the field, including the establishment of effective reservoir management practices and encouraging capital-intensive Enhanced Recovery methods, the provisions empower the government to create regulations aimed at environmental conservation and advancing green energy projects along with the adoption of energy transition measures to help the government and companies realize their climate objectives.
Minister Puri also noted that smaller operators and newcomers frequently encounter challenges in conducting operations due to the substantial costs associated with infrastructure and facilities. This provision allows the government to establish rules to facilitate the sharing of production and processing facilities and other infrastructures among multiple lessees. The proposed amendments also outline a structured approach for imposing penalties and handling appeals through the establishment of an adjudication authority, mechanisms, and appeals processes, he added.
