Font size:
Print
Oilfields Amendment Bill
Context:
On December 3, the Rajya Sabha approved the Oilfields (Regulation and Development) Amendment Bill, 2024, aimed at enhancing domestic production of petroleum and other mineral oils while attracting private investment to reduce reliance on imports.
More on News
- The Bill introduces significant changes to the Oilfields (Regulation and Development) Act of 1948, clearly distinguishing it from the Mines and Minerals (Development and Regulation) Act, 1957.
- If enacted, the amended Act will focus exclusively on the regulation of petroleum and mineral oil production.
Key Features of the Bill
- Defining Mineral Oil: The Bill resolves a long-standing ambiguity by defining “mineral oils” as naturally occurring hydrocarbons, including crude oil, natural gas, and petroleum.
- It excludes coal, lignite, and helium associated with petroleum, as these fall under the Mines and Minerals Act.
- Introduction of Petroleum Leases: The Bill replaces “mining leases” with “petroleum leases,” now defined as permits for prospecting, exploration, development, production, and disposal of mineral oils.
- The regulation of these leases, along with the Centre’s rule-making powers, will also be updated accordingly.
- Encouraging Private Investment: To attract private participation, the Bill ensures existing leases remain valid and unaltered during their term.
- It also replaces criminal penalties for violations with fines—up to ₹25 lakh, and an additional ₹10 lakh per day for ongoing violations.
- This shift aims to create a more business-friendly environment while maintaining accountability.
- Environmental Provisions: The Bill expands the Centre’s authority to make rules aimed at reducing carbon emissions, managing greenhouse gases, and promoting renewable energy projects at oilfields.
Concerns and Criticisms
- Impact on State Powers: Opposition parties have expressed concerns about the Bill’s potential to undermine states’ rights.
- By reframing petroleum leases as distinct from mining leases and focusing on mineral oils, the Bill shifts jurisdiction to the Union List under Entry 53 of the Constitution.
- This could limit states’ authority to tax and collect royalties on these activities, currently protected under Entry 50 of the State List.
- Environmental Risks and Public Sector Prioritisation: Critics have highlighted potential environmental risks associated with increased private sector involvement.
- They argue that public sector enterprises like the Oil and Natural Gas Corporation (ONGC) should be prioritised to manage national resources responsibly.
- Reassurances from the Government: Union Minister assured that states would retain control over granting petroleum leases, addressing concerns about diminished state powers.
- He also emphasised the Bill’s role in reducing dependency on imports and aligning domestic production with global environmental standards.
