The Rajya Sabha passed a landmark bill on Tuesday aimed at making business and investment in oil and gas exploration and production sector.
The bill named the oilfield (Regulation and Development) Amendment Bill, 2024 separates petroleum operations from mining operation to attract greater investment in the sector.
The amendment expands the definition of petroleum and natural gas to include coal bed methane, oil shale, shale gas, shale oil, tight gas, tight oil and gas hydrate, but does not include coal, lignite and helium occurring in the petroleum process. Notably, the original act of 1948 defined petroleum and natural gas as mineral oil.
Talking about the update in the definition, Petroleum and Natural Gas Minister Hardeep Puri wrote on X, “The term ‘mineral oil’ is traditionally understood to be natural gas and petroleum. As unconventional hydrocarbon resources have been discovered and developed, the definition needs to be updated to reflect the modern understanding of the term.”
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The proposed amendments enables centre to make rules to allow sharing of the production, processing and other infrastructure by two or more lessees as the high cost of the business is unaffordable for small businesses.
To take investors in confidence, the bill assures that the terms and conditions of the lease will remain same for the entire period of lease.
The bill also sheds light on urgent need of increasing domestic production to fulfil demand and reduce dependency on import.
Underlining the importance of investors to explore the business opportunities in valuable mineral oils, the report said, “In order to unlock valuable mineral oil resources, it is necessary to attract investment in the sector to infuse necessary capital and technology for expediting petroleum operations in the country by creating an investor friendly environment that promotes ease of doing business, prospects for exploration, development and production of all types of hydrocarbons, ensures stability, promotes adequate opportunities for risk mitigation, addresses energy transition issues including next-generation cleaner fuels and provides for a robust enforcement mechanism for ensuring compliance of the provisions of the said Act.”
The development comes in the line with PM’s vision to boost domestic production. It is important to mention that India depends on foreign countries for 85% of its energy requirements.
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