Rajya Sabha passes bill to amend oilfields Act

New Delhi: The Rajya Sabha on Tuesday passed a bill that seeks to offer policy stability, international arbitration and extended lease periods to oil and gas explorers in the country, said petroleum and natural gas minister Hardeep Puri.

The bill seeking to amend the Oilfields (Regulation and Development) Act, 1948 was introduced in the Rajya Sabha during the previous session. It will have to be passed by the Lok Sabha now.

"The proposal seeks to assure the investor that the terms of the lease shall remain stable for the entire duration of the lease and will not be altered to its disadvantage," Puri wrote in a social media post.


Indian and foreign explorers have long demanded policy stability, which can help protect their economic returns from a project. The amendments will permit the government to frame contracts that can shield explorers from future government actions such as the imposition of windfall tax.

"Amendments propose alternate dispute resolution mechanisms for efficacious dispute resolution methods to Investors' needs and expectations," Puri said.

Foreign oil firms such as ExxonMobil have been demanding a provision for arbitration outside India for dispute resolution. The absence of policy uncertainty and neutral arbitration has kept some foreign investors away from India's exploration licensing rounds.

The amendment will also enable the government "to make rules to enable sharing of production and processing facilities and other infrastructure by two or more lessees", Puri said.

This will help operators, especially smaller ones, to keep the cost of operations low.