India’s NEW Oilfield Act Boosts Exploration and Investment
The recently enacted Oilfield (Regulation and Development) Amendment Act, 2025 (ORD Act) marks a significant step toward creating a more investor-friendly climate in India’s oil and gas sector. With the primary goal of enhancing the Ease of Doing Business (EoDB), the amended legislation introduces several critical reforms designed to streamline operations in the upstream oil and gas industry.
A Joint Working Group (JWG), consisting of key Exploration & Production (E&P) operators and government representatives, has been established to evaluate and tackle challenges affecting EoDB. As a result of their findings, the government has approved a range of reforms that include the introduction of delivery points both within and outside contract areas, facilitating the transfer of Participating Interest (PI) among existing contract holders, and simplifying the field handover process in Discovered Small Fields (DSF) contracts.
A Comprehensive Licensing Approach
Since launching the Hydrocarbon Exploration and Licensing Policy (HELP) in 2016, the government has paved the way for the Open Acreage Licensing Policy (OALP). This initiative has awarded a total of 172 exploration blocks across 378,652 square kilometers in nine bidding rounds. Most notably, OALP Round X has been introduced, offering 25 exploration blocks that cover an impressive 191,986.21 square kilometers, setting a new record for the largest area offered in a single round.
Key Features of the HELP Regime
The salient features of the HELP regime aim to provide a robust framework for the E&P sector. Some highlights include:
- Reduced royalty rates.
- No oil cess imposed.
- A uniform licensing system.
- A revenue-sharing model.
- Exploration rights on all retained areas for the entire contract duration.
- Concessional royalty rates for early commercial production.
- No revenue share-based bidding in certain basin categories.
- Expanded exploration options and incentives for blocks in Category-II and III basins.
- An enhanced originator incentive for specific basins.
Fostering Domestic Production
Beyond enhancing the regulatory framework, these reforms are part of a broader strategy to increase domestic hydrocarbon production and reduce dependence on imported oil and gas. Efforts to achieve this include various policies from 2014 to 2018 focusing on early monetization of discoveries, enhancing recovery methods, and exploring unconventional hydrocarbons. Furthermore, the recent release of approximately 1 million square kilometers of “No-Go” area for offshore exploration opens new avenues for investment.
According to the Minister of State in the Ministry of Petroleum and Natural Gas, Shri Suresh Gopi, these developments signify a commitment to bolstering India’s long-term energy security. With ongoing reforms and supportive policies under the HELP framework, the government aims to empower the E&P sector to enhance domestic production and fortify the country’s energy independence.
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