The Oilfields (Regulation and Development) Amendment Bill, 2024
Kartavya Desk Staff
Syllabus: Government Policies and Interventions/ Economy: Energy
- •Source: ET*
Context: The Oilfields (Regulation and Development) Amendment Bill, 2024, introduced in the Rajya Sabha.
The Bill aims to:
• It aims to amend the Oilfields (Regulation and Development) Act, 1948. Originally, oilfields, mines, and minerals were regulated under the Mines and Minerals (Regulation and Development) Act, 1948, which was later split in 1957 by the Mines and Minerals (Development and Regulation) Act.
• Originally, oilfields, mines, and minerals were regulated under the Mines and Minerals (Regulation and Development) Act, 1948, which was later split in 1957 by the Mines and Minerals (Development and Regulation) Act.
• The Act regulates the exploration and extraction of natural gas and petroleum.
• Ensure Policy Stability: Stabilizes terms of petroleum leases to protect lessees from unfavourable changes.
• Enable International Arbitration: Allows dispute resolution through international arbitration.
• Boost Investor Confidence: Creates an investor-friendly environment to attract investments.
• Facilitate Efficient Development: Encourages joint development of connected fields and shared infrastructure.
Major Provisions of the Bill:
Aspect | Current Provisions | Amended Provisions
Definition of Mineral Oils | Includes petroleum and natural gas. | Expands to include: (i) naturally occurring hydrocarbons, (ii) coal bed methane, (iii) shale gas/oil. Excludes coal, lignite, and helium.
Petroleum Lease | Mining lease for exploration, prospecting, production, and disposal of mineral oils. | Replaces mining lease with petroleum lease, covering similar activities. Existing leases remain valid.
Rule-Making Powers | Regulates lease grant, terms, conservation, production methods, and royalty collection. | Adds rules for (i) merger/combination of leases, (ii) sharing facilities, (iii) environmental protection, and (iv) dispute resolution.
Decriminalisation of Offences | Violations are punishable by up to six months imprisonment or a Rs 1,000 fine. | Penalties increased to Rs 25 lakh; new offences include operating without a lease and non-payment of royalties. Continued violations attract up to Rs 10 lakh per day.
Adjudication of Penalties | Adjudication by an officer of Joint Secretary rank; appeals to Appellate Tribunal under the Petroleum and Natural Gas Board Regulatory Board Act, 2006. | Appeals to the Appellate Tribunal for Electricity under the Electricity Act, 2003.
Conclusion:
The amendment is significant as it ensures energy access, security, and affordability, reduces import dependence by boosting domestic oil and gas production, attracts investment for capital and technological advancement, supports energy transition to cleaner fuels, and establishes a robust enforcement mechanism for compliance.