Summary

As Introduced in the Rajya Sabha on the 5Th August, 2024

STATEMENT OF OBJECTS AND REASONS

1. Originally, oilfields, mines and minerals were comprehensively regulated together through the Mines and Minerals (Regulation and Development) Act, 1948. Subsequently, in 1957, the Mines and Minerals (Development and Regulation) Act, 1957 was enacted for the development and regulation of mines and minerals under the control of the Union. The original Act of 1948 was also renamed as the Oilfields (Regulation and Development) Act, 1948 (the said Act) and made applicable to mineral oils only.

2. The said Act, which provides for a very different global energy context, requires to be amended to meet the needs and aspirations of the country for energy access, energy security and energy affordability. Further, there is an urgent and pressing need to increase domestic production of oil and gas to meet the rising demand for energy and reduce import dependence of 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, ensures stability, promotes adequate opportunities for risk mitigation, addresses energy transition issues including next-generation cleaner fuels and provides for a robust enforcement mechanism for ensuring compliance of the provisions of the said Act.

3. Therefore, it is felt necessary to amend the said Act and for that purpose to introduce the Oilfields (Regulation and Development) Amendment Bill, 2024 in Parliament. The salient features of the amendments proposed in the said Bill, inter alia, are-

(a) delinking of petroleum operations from mining operations;

(b) broadening the scope of the expression “mineral oils”;

(c) Introducing the concept of “petroleum lease”;

(d) granting lease on stable terms;

(e) strengthening 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;

(f) providing for efficacious dispute resolution;

(g) decriminalising the provisions of the said Act by introducing penalties, adjudication by an adjudicating authority and appeal as against the order of adjudicating authority;

(h) creating 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.

4. The Bill seeks to achieve the above objectives.

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