Oilfields (Regulation and Development) Act 1948 Amendment
Source: Economic Times
GS II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation
Overview
- News in Brief
- Oilfields (Regulation and Development) Act 1948 Amendment
- What is the significance of the Act?
Why in the News?
The Oilfields (Regulation and Development) Amendment Bill, 2024 was introduced in Rajya Sabha on August 5, 2024.
News in Brief
- The Bill amends the Oilfields (Regulation and Development) Act, of 1948.
- The Act regulates the exploration and extraction of natural gas and petroleum.
- The bill passed via voice vote in Rajya Sabha.
About Oilfields (Regulation and Development) Act 1948 Amendment
Aim of Amendment: The bill aims to delink petroleum operations from mining, update definitions to include modern hydrocarbon resources, and streamline processes to encourage investment and operation efficiency in the energy sector
The definition of mineral oils expanded
- The Act defines mineral oils as petroleum and natural gas.
- It clarifies that mineral oils will not include coal, lignite or helium.
- Bill expands the definition to include
- Any naturally occurring hydrocarbon
- Coal bed methane
- Shale gas/oil
Petroleum Lease introduced
- The leasing framework has been updated, with new agreements using the term petroleum lease instead of mining lease.
- What will happen to the existing Mining lease of Petroleum products?
- Existing mining leases granted under the Act will continue to be valid.
Power for Central Governments
- Following Existing provisions retain
- Regulating the grant of leases
- Terms and conditions of leases including the minimum and the maximum area and the period of lease
- Conservation and development of mineral oils
- Methods for producing oil
- Manner of collection of royalties, fees, and taxes.
- Adds the following powers
- Merger and combination of petroleum leases
- Sharing of production and processing facilities
- Obligations of leases towards protecting the environment and reducing emissions
- Alternative mechanisms for resolving disputes about the grant of petroleum leases.
Offence Decriminalisation
- Punishments
- According to Current Rules before amendment violations are punishable with imprisonment up to 6 months, a fine of Rs. 1000 or both.
- Instead provides that the above offence will be punishable with a penalty of Rs 25 lakh.
- Other Offences are punishable with a penalty of Rs 25 lakh
- Undertaking activities related to mineral oils such as exploring, prospecting, and production without a valid lease.
- Non-payment of royalty.
- Continued violation in case of all the above offences will attract a penalty of up to Rs 10 lakh per day.
How adjudication of Penalities happens Oilfields (Regulation and Development) Act 1948 Amendment?
- The central government will appoint an officer of the rank of Joint Secretary or above.
- Appeals against the decisions of the Adjudicating Authority will lie before the Appellate Tribunal specified in the Petroleum and Natural Gas Board Regulatory Board Act, 2006.
What is the adjudication process?
- Adjudication process in which the offence committer and the dispute reviewer review the offences.
- Here in this case Joint Secretary or above will review the process.
- 2006 Act designates the Appellate Tribunal for Electricity, constituted under the Electricity Act, 2003, as the Appellate Tribunal.
What is the significance of the Act?
- The Oilfields (Regulation and Development) Act, of 1948, and its recent amendments play a crucial role in ensuring the sustainable development of India’s oil and gas resources.
- By providing a clear regulatory framework, the Act helps attract investment, promote operational efficiency, and support the country’s energy security and environmental goals.
- They provide a comprehensive framework for exploration, production, and environmental protection, ensuring the sustainable exploitation of oil and gas resources.
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