Originally, oilfields, mines and minerals were comprehensively regulated together through the Mines and Minerals (Regulation and Development) Act, 1948. In 1957, the Mines and Minerals (Development and Regulation) Act was enacted for development and regulation of mines and minerals.

The original Act (1948) was renamed as Oilfields (Regulation and Development) Act, 1948 and was made applicable to only mineral oils, which the Ministry is now amending to enhance the ease of doing business in the E&P sector.

The amendments introduce the concept of ‘petroleum lease’ and also 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. Besides, it separates mining operations from petroleum operations.

Through the proposed amendments, the government aims to create an investor-friendly environment and enhance global competitiveness of future oilfield contracts by addressing long-standing concerns of E&P firms.

Besides, there is a pressing need to increase domestic production of oil and gas to meet the rising demand for energy and reduce import dependence on the country.

In order to unlock valuable mineral oil resources, it is necessary to attract investment in the sector to infuse necessary capital and technology for expediting petroleum operations in the country by creating an investor friendly environment that promotes ease of doing business, prospects for exploration, development and production of all types of hydrocarbons.

The Bill expands the definition of mineral oils to include petroleum and natural gas. It also expands the definition to include any naturally occurring hydrocarbon, coal bed methane, and shale gas/oil. 

The Bill provides for a mining lease covering activities such as exploration, prospecting, production, making merchantable, and disposal of mineral oils. 

It also replaces mining lease with a petroleum lease, which also covers a similar set of activities. Existing mining leases granted under the Act will continue to be valid.

The government seeks to strengthen petroleum operations through rules framed for governing various functional aspects, such as, grants of leases or licences, their extension or renewal, sharing of production and processing facilities including infrastructure and safety at oilfields.

Efficacious dispute resolution, decriminalising provisions in the said Act by introducing penalties, adjudication by an adjudicating authority and appeal as against the order of adjudicating authority are other critical avenues that the Bill aims to introduce.

It seeks to create an environment for facilitating energy transition by enabling development of comprehensive energy projects for harnessing wind and solar energy along with mineral oils at oilfields.

DMK MP NR Elango demanded that the Bill must be sent to a select committee raising concerns that some definitions are against the state’s federal rights.

“The Bill seeks to expand the meaning of mineral oils. The word ‘mine’ is omitted from the definitions,” he said, adding that mining is being replaced, only to take away the rights of the states.

NCP MP Fauzia Khan and CPI MP PP Suneer expressed concerns over decriminalisation of offences under the new Bill. Charges were made that the government is aggressively promoting private players in the E&P sector.