The Ministry of Petroleum and Natural Gas on Wednesday released the Draft Petroleum & Natural Gas Rules, 2025. The sweeping reforms aim to bolster investor confidence, streamline operations, and align India’s energy framework with global sustainability and decarbonisation targets.
Announcing the initiative on X, Union Minister Hardeep Singh Puri said, “As part of our focus to accelerate oil and gas exploration under the leadership of Prime Minister Narendra Modi Ji, we are bringing in a series of pathbreaking policy reforms to promote exploration and production. These reforms, including the Draft Petroleum & Natural Gas Rules, 2025, will significantly enhance the ease of doing business for our E&P operators.”
The ministry has invited feedback from industry stakeholders, experts, and the public on the draft rules, the revised Model Revenue Sharing Contract (MRSC), and the updated Petroleum Lease format. Suggestions can be submitted via email to png-rules@dghindia.gov.in by July 17. The public consultation process will conclude at Urja Varta 2025, scheduled to be held at Bharat Mandapam, New Delhi, on the same day.
A key highlight of the draft rules is the inclusion of a stabilisation clause designed to shield lessees from future legal or fiscal uncertainties such as hikes in taxes or royalties. Under this clause, companies may be compensated or allowed deductions in case of adverse policy shifts, thereby ensuring a secure investment environment.
To boost infrastructure efficiency, the rules require lessees to disclose underutilised pipeline and facility capacities and provide third-party access under government oversight. In a first for India’s upstream sector, the draft also permits integration of renewable and low-carbon energy projects—including solar, wind, hydrogen, and geothermal—within existing oilfield blocks, provided safety norms are followed and petroleum operations are not disrupted.
Environmental sustainability is a central theme in the proposed rules. They introduce comprehensive guidelines for greenhouse gas (GHG) monitoring and reporting, establish a legal framework for carbon capture and storage (CCS), and make it mandatory for operators to maintain site restoration funds, with a minimum five-year post-closure monitoring period.
In terms of data governance, the draft asserts that all operational data and physical samples generated during exploration and production activities will be the property of the Government of India. While lessees can use this data internally, any external sharing or export will require prior government approval, with confidentiality rules in place for up to seven years.
The rules also propose the establishment of a dedicated Adjudicating Authority, not below the rank of Joint Secretary, to enforce compliance, resolve disputes, and impose penalties. Other significant provisions include streamlined processes for lease mergers, extensions, and unitisation of reservoirs across multiple blocks to enhance operational flexibility.
The new draft rules are intended to replace the Petroleum Concession Rules, 1949, and the Petroleum and Natural Gas Rules, 1959. They follow recent amendments to the Oilfields (Regulation and Development) Act, 1948, and are strategically timed ahead of OALP Round X, India’s largest-ever exploration and production bidding round. OALP, or the Open Acreage Licensing Policy, is a mechanism in India’s Hydrocarbon Exploration and Licensing Policy (HELP) that allows investors to propose exploration blocks for oil and gas based on available data, rather than waiting for formal government bid rounds
Complementing the proposed rules, the ministry has also released a revised Model Revenue Sharing Contract, which incorporates new provisions related to unitisation, lease mergers, and infrastructure-sharing. The updated Petroleum Lease format further clarifies procedures for lease relinquishment, reservoir extensions, and lease cancellations—providing greater clarity for operators.
Highlighting the significance of these reforms, Minister Puri remarked, “It has never been easier, faster, and more profitable to explore oil and gas in India. We look forward to constructive engagement to shape a modern, investor-friendly regime.”
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