Simplified Oil Rules
NEW DELHI
In a major move to simplify operations in the oil and gas sector, the Petroleum and Natural Gas Rules, 2025 have been amended to promote ease of doing business, Union Minister Hardeep Singh Puri announced.
The amended rules allow lessees to carry out all types of mineral oil operations under a single petroleum lease, including decarbonisation projects and comprehensive energy initiatives at oilfields. Applications for petroleum leases will now be decided within 180 days, and long-term leases of up to 30 years may be granted, with extensions allowed for the economic life of the field, enabling companies to plan investments effectively.
Under the new framework, lessees must submit annual declarations of installed, used, and excess infrastructure capacity. They may also jointly develop or share facilities by mutual agreement. Lease formats have been standardized for uniformity and easier administration, and rules now mandate reduction plans with time-bound targets to achieve zero gas flaring and lower greenhouse gas emissions.
The rules also specify that the seat of arbitration for lease and contractual disputes involving only Indian companies will be New Delhi. If foreign companies are involved, a neutral arbitration seat may be chosen. National Oil Companies (NOCs) must notify discoveries promptly, submit field development plans within prescribed timeframes, obtain government approval for development areas, and report regularly on production activities.
Penalties for violations have been increased to Rs 25 lakh, with continuation of non-compliance attracting Rs 10 lakh per day, the Minister added.
Puri highlighted that the amendments aim to strengthen India’s domestic exploration and hydrocarbon production infrastructure, supporting the government’s mission to achieve energy security under the leadership of Prime Minister Narendra Modi.
