Oilfields (Regulation and Development) Amendment Bill, 2024

News: The Rajya Sabha recently passed the Oilfields (Regulation and Development) Amendment Bill, 2024. It enables major changes in India’s oil and gas exploration laws.

About Oilfields (Regulation and Development) Amendment Bill, 2024

• The bill seeks to amend the Oilfields (Regulation and Development) Act of 1948, with the goal of increasing investment in oil and gas exploration and production.
• The bill regulates the exploration and extraction of petroleum and natural gas.

Salient features of the bill

Expansion of the definition of mineral oils

• The amended bill expands the definition of mineral oils to include petroleum, natural gas, naturally occurring hydrocarbons, coal bed methane, and shale gas/oil.
• However, it clarifies that mineral oils will not include coal, lignite or helium.

Introduction of petroleum lease:

• The bill also covers mining leases, which include activities such as exploration, prospecting, production, commercialization, and disposal of mineral oils.
• The new bill will replace mining leases with petroleum leases, covering similar activities. However, mining leases granted under the previous Act will remain valid.

Central government’s authority to make rules

• It maintains the central government’s authority to regulate leases, conservation, and royalties.
• Additionally, it introduces provisions for lease mergers, sharing of facilities, environmental protection, and dispute resolution.

Penalties

• The bill seeks to decriminalize certain provisions of the original 1948 law by introducing penalties. For rule violations, it increases the penalty from the current fine of Rs 1,000 to Rs 25 lakh.
• For exploration, prospecting, and production without a valid lease, a penalty of Rs 25 lakh will be imposed, with continued violations attracting a daily fine of Rs 10 lakh.

Adjudication of penalties

• For dispute resolution, the central government will appoint an officer of joint secretary rank or higher to handle penalty adjudications.
• Appeals against the adjudication officer’s decision can be made to the Appellate Tribunal under the Petroleum and Natural Gas Regulatory Board Act, 2006.