Oil Field Amendment Bill 2024: A Boost for India's Energy Sector

The Oil Field Amendment Bill 2024 marks a significant shift in India's approach to energy security and self-sufficiency. As the country continues to rely heavily on crude oil imports, this bill introduces key regulatory reforms to unlock domestic potential and attract global investments. By easing operational restrictions, enhancing investor confidence, and promoting continuous exploration, the government aims to transform India into a major player in the global oil and gas market.

With vast untapped reserves and increasing energy demands, India is at a critical juncture. The amendments bring clarity, streamline processes, and remove outdated barriers that previously hindered sectoral growth. The bill is not just about legal modifications; it is a strategic move towards reducing import dependency and strengthening the nation’s energy security.

Oil Field Amendment Bill 2024: Key Policy Changes

• 100% Foreign Investment: The bill allows full foreign participation in Discovered Small Fields (DSFs), inviting advanced technology and expertise into the sector.

• Market-Driven Pricing: Companies now have full control over pricing and marketing, fostering a competitive energy market.

• Continuous Exploration: Firms can explore throughout the contract period, maximizing resource extraction.

• Financial Incentives: Removal of upfront signature bonuses and cess on production reduces operational costs, making investments more lucrative.

Impact on India's Oil & Gas Sector

Since the implementation of the DSF policy:

• Hydrocarbon reserves under DSF have reached 162 MMTOE.

• Investments of $2.9 billion have poured in.

• 29 new players have entered the market.

• 56 active contracts are driving higher production.

Production figures as of February 2025:

• Oil: 0.107 MMT

• Gas: 0.214 BCM

Government’s Vision: Energy Security & Growth

Petroleum Minister Hardeep Singh Puri emphasized that the bill will bring stability, predictability, and investment confidence to India's oil and gas industry. With 32 billion tons of reserves and vast sedimentary basins, the country has massive untapped potential. The bill seeks to harness these resources efficiently while ensuring a balanced approach to economic and environmental concerns.

Lok Sabha Approval & Key Amendments

Passed on March 12, 2025, the bill modernizes the Oilfields Act, 1948, by:

• Expanding the definition of mineral oils to include shale gas, condensate, and CBM.

• Shifting from mining leases to petroleum leases for better regulatory clarity.

• Increasing financial penalties for violations, replacing criminal prosecution with monetary fines up to ₹25 lakh.

Reducing Import Dependency

India imports 85% of its crude oil and 50% of its natural gas. The bill is a crucial step toward self-reliance, strengthening domestic production, and cutting dependency on imports. With enhanced investment opportunities and streamlined regulations, the government is setting the stage for a more robust energy ecosystem that can withstand global market fluctuations.

Challenges & Criticism

• Federal Taxation Concerns: Shift from mining to petroleum leases may lead to jurisdictional disputes between states and the Centre.

• Environmental Risks: Critics worry about relaxed penalties reducing corporate accountability.

• Privatization Debate: Opposition argues public enterprises like ONGC should be prioritized over private firms.

The Road Ahead

The bill aligns with India's energy security goals and supports the 10th Open Acreage Licensing Policy (OALP), opening new offshore exploration opportunities. While challenges exist, the government maintains that these reforms will unlock India's hydrocarbon potential and drive long-term energy sustainability. The coming years will determine whether these reforms can truly balance economic growth, energy independence, and environmental responsibility.