Lok Sabha Oilfield Amendment Bill 2024 – Objectives and Key Features of the Amendment Bill here’s all you need to know
Lok Sabha Oilfield Amendment Bill 2024 – marking a significant step towards reforming India’s oil and gas sector. The Bill, which was previously approved by the Rajya Sabha on December 3, 2024, aims to modernize the legal framework governing the sector. It seeks to attract investment, enhance exploration and production, and ensure energy availability, accessibility, affordability, and security for citizens. The reforms align with the Prime Minister’s vision of Viksit Bharat by 2047.
Lok Sabha Oilfield Amendment Bill 2024
Key Reforms in the Oil & Gas Sector
Over the past decade, the government has introduced several groundbreaking reforms to boost the exploration and production of oil and gas in India. Notable measures include:
- Transition from a production-sharing to a revenue-sharing contract regime.
- Simplification of regulatory processes to ease operations.
- Opening of previously restricted No-Go areas for exploration.
- Deregulation of crude oil and introduction of pricing and marketing freedom for natural gas.
As a result of these reforms, over 76% of active exploration acreage in India today has been awarded since 2014.
Objectives and Key Features of the Lok Sabha Oilfield Amendment Bill 2024
Introducing the Bill in Parliament, Minister of Petroleum and Natural Gas, Hardeep Singh Puri, highlighted its importance as the most extensive legal reform in the sector’s history. He emphasized the need for a stable, predictable, and efficient legal framework to attract investors, given the long gestation periods and high risks involved in oil and gas projects.
Lok Sabha Oilfield Amendment Bill 2024 addresses several longstanding challenges and introduces key changes, including:
1. Simplified Permit System
- Eliminates the outdated practice of treating mining and petroleum operations under the same regulatory framework.
- Introduces a single petroleum lease permit, replacing the previous system that required multiple licenses for different hydrocarbon activities.
2. Encouraging Technological Advancements
- Facilitates the development of comprehensive energy projects.
- Promotes the adoption of emerging technologies such as Carbon Capture, Utilization, and Sequestration (CCUS) and green hydrogen production.
3. Supporting Small Operators
- Helps small oil field operators by enabling infrastructure and resource sharing between companies, improving the viability of oil blocks.
- Builds on the Discovered Small Fields (DSF) Policy of 2015, which allowed small operators to develop previously unmonetized fields.
Lok Sabha Oilfield Amendment Bill 2024
4. Enhancing Investor Confidence
- Strengthens operational stability by ensuring long-term lease tenures with predictable conditions.
- Introduces efficient alternative dispute resolution mechanisms, ensuring faster, fair, and cost-effective resolution of disputes.
5. Stricter Penalties for Regulatory Violations
- Increases penalties to ₹25 lakh, with an additional ₹10 lakh per day for continued violations.
- Establishes a dedicated adjudication authority and an appellate mechanism for imposing penalties and handling disputes effectively.
No Impact on State Rights
The Bill upholds the principle of cooperative federalism, ensuring that state governments retain their existing rights. States will continue to grant petroleum leases, issue statutory clearances, and receive royalties without any change.
Boosting India’s Hydrocarbon Potential
Minister Puri emphasized that the Lok Sabha Oilfield Amendment Bill 2024, will significantly improve Ease of Doing Business in the oil and gas sector. By creating a more investor-friendly environment, the Bill is expected to unlock India’s hydrocarbon potential, making the country a more attractive destination for energy production and investment.
With its passage, India moves closer to achieving energy self-sufficiency while reinforcing its commitment to long-term economic and industrial growth.
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