Context:

Recently, the Oilfields (Regulation and Development) Amendment Bill, 2024, was passed by the Rajya Sabha through a voice vote.

More on the News

• The Bill amends the Oilfields (Regulation and Development) Act of 1948 to enhance the ease of doing business in the exploration and production (E&P) sector.
• Originally, oilfields, mines, and minerals were comprehensively regulated through the Mines and Minerals (Regulation and Development) Act, of 1948.
• Then in 1957, the Mines and Minerals (Development and Regulation) Act was enacted for the development and regulation of mines and minerals.
• The original Act of 1948 was renamed as the Oilfields (Regulation and Development) Act, 1948 and was made applicable to mineral oils only.

Objectives of the Bill

• The Bill aims to streamline the oil and gas exploration business in India and delink petroleum operations from mining operations.
• It calls for reporting of carbon and greenhouse gas emissions from mineral oil operations and facilitating comprehensive energy projects at oilfields, including renewables such as solar, wind, and others.
• Towards decarbonising efforts, it has also expanded newer technologies such as green hydrogen and carbon capture utilisation and storage (CCUS). 

Key Amendments of the Bill

Expansion of Mineral Oils Definition:

• The Bill expands the definition of mineral oils to include:
• Naturally occurring hydrocarbons.
• Coal bed methane.
• Shale gas/oil.
• Exclusions: Mineral oils will not include coal, lignite, and helium.

Introduction of Petroleum Lease:

• The Act of 1948 provides for a mining lease. The Bill replaces the existing mining lease with a petroleum lease, which covers activities like exploration, prospecting, production, and disposal of mineral oils.
• However, existing mining leases under the Act will remain valid.

Rule-Making Powers of the Central Government:

• The Bill retains central government powers to make rules on:
• Granting of leases, including terms, conditions, and areas.
• Conservation, development, and production methods for mineral oils.
• Collection of royalties, fees, and taxes.
• New provisions in the Bill include rules on: 
• Merger and combination of petroleum leases.
• Sharing of production and processing facilities.
• Lessees' obligations to protect the environment and reduce emissions.
• Alternative dispute resolution mechanisms regarding petroleum leases.

Decriminalization of Offences:

• The Bill proposes to remove the earlier imprisonment provision for the rule violation to make it more business-friendly. However, it increases the monetary fine for them from Rs. 1000 to Rs 25 lakhs. 
• The also adds new offences:
• Undertaking activities like exploration, prospecting, or production without a valid lease.
• Non-payment of royalty.
• These new offences are also punishable with a penalty of Rs 25 lakh. However, continued violations in all offences will attract an additional penalty of up to Rs 10 lakh per day.

Adjudication of Penalties:

• The central government will appoint an officer of the rank of Joint Secretary or higher to adjudicate penalties.
• Appeals can be made to the Appellate Tribunal under the Petroleum and Natural Gas Regulatory Board Act, 2006.