India Unlocks Oil & Gas: New Rules to Fuel Investment

The Union government has notified the Petroleum and Natural Gas Rules, 2025, with the objective of streamlining India’s oil and gas regulatory framework and boosting domestic and foreign investment.

Notified under the Oilfields (Regulation and Development) Amendment Act, 2025, the rules replace multiple licensing regimes with a single petroleum lease that covers exploration, development, and production of all hydrocarbons, including unconventional resources. Petroleum leases may be granted for up to 30 years and extended for the entire economic life of a field, while providing protection against adverse regulatory changes.

The new framework decriminalises regulatory violations, replacing criminal penalties with monetary fines of up to ₹25 lakh, along with ₹10 lakh per day for continuing non-compliance.

To improve efficiency and sustainability, the rules promote shared infrastructure development and require time-bound plans to eliminate routine gas flaring and reduce greenhouse gas emissions. Applications for petroleum leases must be decided within 180 days, ensuring faster approvals.

An expedited dispute resolution mechanism has been introduced, and the Oil Industry Safety Directorate has been designated to oversee offshore safety, conduct audits, and enforce operational standards.

News by Rahul Yelligetti.