VINOD BHAT
NEW DELHI, Mar 20: In a significant move aimed at revitalizing the oil and gas sector, the Parliament on Wednesday passed the New Oil Field Amendment Bill, 2025, introducing investor-friendly reforms for small oil fields across the country. The amendment is expected to attract both domestic and foreign investors, facilitating a surge in exploration and production (E&P) activities, thereby boosting India’s energy security.
Key Provisions of the Amendment
The New Oil Field Amendment Bill seeks to modernize existing regulations governing the management of small and marginal oil fields. These fields, often overlooked due to high operational costs and low returns under previous frameworks, are now poised to become more lucrative for private investors.
According to official sources, the bill primarily focuses on reducing bureaucratic hurdles and providing operational flexibility to investors. Some of the salient features of the amendment include:
Simplified Licensing and Approval Process: The bill introduces a streamlined single-window clearance mechanism, reducing delays in obtaining regulatory approvals for exploration and production. This move aims to cut down the time taken for project execution, thus increasing operational efficiency.
Revenue Sharing Model Overhaul: The amendment replaces the existing profit-sharing model with a more flexible revenue-sharing model. Under this structure, the government will receive a percentage of the revenue generated, irrespective of production costs, offering clarity and stability to investors.
Extended Lease Periods: The bill extends the lease period for small oil fields from 20 to 30 years, giving investors a longer horizon to recover their investments and maximize profits.
Lower Royalty and Taxation Rates: To incentivize investment, royalty rates on production from small and marginal oil fields have been reduced, along with lower tax slabs. This is expected to make operations more cost-effective and attractive to investors.
Increased Participation of Private Players: The bill opens avenues for more private sector involvement by allowing 100% foreign direct investment (FDI) in the exploration and production of small oil fields. This is likely to lead to the adoption of advanced technologies and better management practices.
Government’s Vision and Industry Response
Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, while introducing the bill in Parliament, emphasized that these amendments align with India’s goal of achieving self-reliance in energy. He stated, “The new provisions will unlock the true potential of India’s small oil fields by bringing in fresh capital and technology. This amendment reflects the government’s commitment to reducing import dependency and ensuring energy security.”
Puri added that the bill will particularly benefit states like Gujarat, Rajasthan, and Assam, which host a large number of small oil fields with untapped potential.
Industry Experts Welcome the Move
Energy sector experts and industry bodies have welcomed the amendments, calling them a game-changer for India’s E&P landscape. “The introduction of a revenue-sharing model and the simplification of procedures will encourage global investors to explore the untapped resources of India,” said Anil Kumar, President of the Federation of Indian Petroleum Industry (FIPI).
“The amendments will enable more efficient utilization of marginal oil fields that were previously unviable due to high
