What's Brewing

In August 2024, the Minister for Petroleum and Natural Gas introduced the Oilfields Bill seeking to amend the Oilfields (Regulation & Development) Act of 1948 (the Act). 

The objective of the Amendment Bill is primarily to delink petroleum operations from other mining operations and introduce the concept of ‘petroleum leasing’. 

The following are the highlights of the Amendment Bill:

1. The definition/scope of the word ‘mineral oil’ is to be amended to mean: any naturally occurring hydrocarbon in gaseous, liquid, viscous or solid form and shall include all forms of crude oil, petroleum or natural gas. ‘Mineral Oil’, however, shall not include coal, lignite and helium occurring in association with coal or shale.
2. The words ‘mining lease’ shall be substituted by the words ‘petroleum lease’, where the word ‘lease’ shall mean: lease granted on or after the commencement of the Act for the purposes of prospecting, exploration, development, production, transportation and distribution of any mineral oil. The word ‘mine’ shall be replaced by the word ‘petroleum’. ‘Mineral’ shall be substituted by the word ‘mineral oil’.  
3. A clause is introduced in the Bill that henceforth prohibits any person from conducting any type of ‘lease’ operation in the land and water territories of India, without a valid license under the Act. Leases granted prior to the commencement of the Act shall continue unhindered but strictly as per the amended Act. 
4. The quantum of penalty for contravention of the provisions of the Act is proposed to be increased from rupees one thousand to rupees twenty-five lakhs. Contravention of the provisions of the Act shall entail a penalty of rupees ten lakhs per day for the duration of the contravention, instead of the original amount of rupees one hundred.
5. Adjudication pertaining to contravention of the Act and of levy of penalty shall be done by a central govt authorized official of rank not lower than Joint Secretary of GOI, but only after giving the person an opportunity to present his facts.  
6. Appeals against the adjudication shall be heard by the Appellate Tribunal as per the Petroleum & Natural Gas Regulation Board Act of 2006.
7. All mining leases and licenses granted before the commencement of this Amendment Bill shall continue unhindered in their tenure, but subject to the provisions of the ‘amended’ Act.

The Amendment Bill seeks to remove anomalies in the Act and bring much needed clarity to its scope and terms, in keeping with the reality of the present geo-economic situation.

For full text of the Bill: 
https://prsindia.org/files/bills_acts/bills_parliament/2024/Disaster_Management_(Amendment)_Bill_2024.pdf