The Oilfields (Regulation and Development) Amendment Bill, 2024, was passed in Rajya Sabha by voice vote on Tuesday following a two-and-a-half hour discussion.
The bill, introduced in the upper house on August 5 sought to amend the 1948 Act to delink petroleum operations from mining operations to attract investments in the sector.
It also amends the definition of mineral oils, decriminalises offences, allows for sharing of infrastructure, and empowers the central government to make rules about alternative adjudication mechanism when it comes to disputes related to petroleum leases.
“When I had the privilege of joining this ministry three years ago, our daily consumption of crude in terms of millions of barrels was 5 million barrels a day. In the three years, it has gone up to 5.4 million barrels a day,” minister of petroleum and natural gas Hardeep Singh Puri said during the discussion.
At a sustained growth rate of about 6.5%, Puri said the government expects this to go up to 6 million barrels a day in about a year.
“It is vital, therefore, for us to increase exploration and production of gas and oil, both onshore and offshore. For achieving this, it is necessary for us to address policies and laws which inhibit our efforts,” he said.
Puri said that both exploration and production both require heavy investment and long gestation period, and that to dig an offshore well, an initial investment of about $100 million is required.
{{/usCountry}}Puri said that both exploration and production both require heavy investment and long gestation period, and that to dig an offshore well, an initial investment of about $100 million is required.
{{/usCountry}}“We had to bear the brunt because the gestation fallout of non-action between 2006 and 2016 had to be borne by this government,” he said.
The amendments propose to expand the definition of “mineral oils” to include any naturally occurring hydrocarbon, coal bed methane, and shale gas/oil, and excludes coal, lignite and helium.
The extant law issues “mining leases” while the amendments seek to replace them with a “petroleum lease” which would include “prospecting, exploration, development, production, making merchantable, carrying away or disposing of mineral oils or for purposes connected therewith, and includes a mining lease granted before the commencement of the said Act”. Existing mining leases would continue.