Latest news with #DraftPetroleumandNaturalGasRules
India Gazette
09-07-2025
- Business
- India Gazette
Draft PNG Rules introduced aimed at modernising India's upstream oil-gas framework
New Delhi [India], July 9 (ANI): The Ministry of Petroleum and Natural Gas has introduced the Draft Petroleum and Natural Gas Rules, 2025, aimed at significantly enhancing the ease of doing business of the exploration and production (E&P) operators. The Minister urged all stakeholders, industry leaders, experts, and citizens to share their feedback on the Draft, the revised Model Revenue Sharing Contract (MRSC) and the updated Petroleum Lease format by July 17, 2025, at [email protected]. The consultation process will culminate at Urja Varta 2025, scheduled to take place at Bharat Mandapam, New Delhi, on July 17. The Draft Petroleum and Natural Gas Rules, 2025, aim to modernise India's upstream oil and gas framework with several major reforms. Key among them is the introduction of an investor-friendly stabilisation clause, designed to protect lessees from the adverse impacts of future legal or fiscal changes, such as increases in taxes, royalties, or other levies, by allowing for compensation or deductions. To reduce infrastructure duplication and encourage smaller players, the draft mandates that lessees declare under-utilised capacity in pipelines and other facilities, and provide third-party access on fair terms, subject to government oversight. For the first time, the draft rules permit operators to undertake integrated renewable and low-carbon projects, including solar, wind, hydrogen, and geothermal energy--within oilfield blocks, provided they meet safety standards and do not interfere with petroleum production. Strengthening environmental stewardship, the draft introduces detailed requirements for monitoring and reporting greenhouse gas emissions, establishes a regulatory framework for carbon capture and storage (CCS), and mandates site restoration funds with post-closure monitoring for a minimum of five years. In terms of data governance, all operational data and physical samples generated during exploration and production will belong to the Government of India. Lessees can use this data internally, but any export or external use requires government approval, with confidentiality protections lasting up to seven years. The draft rules also propose the creation of a dedicated Adjudicating Authority, not below the rank of Joint Secretary, empowered to enforce compliance, resolve disputes, and impose penalties. Additional provisions include clearer processes for lease mergers, extensions, and unitisation of reservoirs spanning multiple blocks, aimed at improving operational flexibility. These reforms replace the outdated Petroleum Concession Rules, 1949 and Petroleum and Natural Gas Rules, 1959, and follow the recent amendment of the Oilfields (Regulation and Development) Act, 1948. They are also timed to precede OALP Round X, India's largest-ever exploration and production bidding round. Alongside the draft rules, the Ministry has released a revised Model Revenue Sharing Contract that aligns with the new framework, particularly regarding unitisation, merged lease areas, and infrastructure sharing obligations. The revised Petroleum Lease format clarifies processes on lease relinquishment, reservoir extension and cancellation triggers, thereby providing greater operational certainty. Hardeep Singh Puri emphasised, 'It has never been easier, faster and more profitable to explore oil and gas in India. We look forward to constructive engagement to shape a modern, investor-friendly regime.' (ANI)
Hans India
19-06-2025
- Business
- Hans India
What The Draft Petroleum And Natural Gas Rules, 2025 Aim To Change
India's rapid development is driving a growing demand for energy. This has made Hydrocarbon Exploration and Production (E&P) a high priority for the Government of India. With 90% of the nation's crude oil requirements currently met through imports, advancing domestic efforts has become crucial for achieving energy self-reliance. To accelerate these efforts, the Ministry of Petroleum and Natural Gas has recently released the Draft Petroleum and Natural Gas Rules, 2025, which is intended to replace the Oilfields (Regulation and Development), Act 1948 and the Petroleum and Natural Gas Rules, 1959. Sharing his insight on the Draft PNG Rules, Advocate Madhur Baya, the Founder of the Mumbai-based LexArbitri, a boutique dispute resolution law firm, said, 'While it is indeed heartening to note that rather than tweaking the Rules yet again to reflect the changed energy sector landscape, the Government has chosen to bring in a grounds-up fresh set of Rules, in my view, there have been as many misses as hits in the Draft.' The draft suggests an authorization for production from all parts of a reservoir, including those extending beyond the geographical boundary of the contract area. This may involve extending or merging lease areas and expanding lease rights to conduct all mineral oil operations across the spectrum of energy hydrocarbons, which is potentially positive. Another welcome step is the push for transparency by making it mandatory for the Government to now provide written reasons for rejecting applications or issuing directions, aligning with international best practices. The draft also promotes environmental safeguards by encouraging in-reservoir sequestration over atmospheric release. On the downside, a key concern is the Government's overreach in redefining contractual terms to align contracts, which risks undermining the objective of improving ease of business in the hydrocarbons sector. 'As well-intentioned as this may be, it could be construed as a veiled attempt to rewrite contracts in a manner that suits the Government,' he added. Another major concern is the mandatory relinquishment of lease areas if a contractor disagrees with the Government-formulated unitization plan. Reflecting on these weak points, he added, 'These misses, in our view, will disincentivize foreign and domestic investments in the sector, as every investor will want certainty that the agreed bargain will not be altered ex post facto, against its interests, and on amorphous grounds.' These concerns are particularly significant considering the capital-intensive nature of the energy sector and the fact that, in India, E&P is largely driven by public players. Increasing production would require greater participation from foreign players to leverage advanced technology and extensive expertise in deepwater and unconventional sources of hydrocarbons. For that, industry-friendly regulations are a must.
