New Delhi: India has notified the Petroleum and Natural Gas Rules, 2025, creating a modern rulebook to attract investment and make oil and gas business easier. The rules flow from the Oilfields (Regulation and Development) Amendment Act, 2025 and replace an old system that needed many approvals. The government says the new framework will speed up projects, cut delays and raise domestic output.
Single Petroleum Lease and Long Stability
A major change is the move to a single petroleum lease. One licence will now cover exploration, development and production of all hydrocarbons, including shale. Lease tenure can run up to 30 years and may be extended for the full economic life of a field. Terms are protected from negative changes during operations, giving companies comfort to invest for the long term.
Penalties Focus on Money, Not Jail
The rules remove criminal penalties for operational violations and replace them with financial fines. A breach can attract a penalty of Rs 25 lakh, plus Rs 10 lakh for every day the violation continues. The idea is to improve compliance without criminalising business activity, while still keeping penalties strong.
Lower Costs Through Shared Infrastructure
Operators are allowed to share or jointly develop pipelines, processing units and other facilities by agreement. This can reduce costs and speed up development. Companies must file yearly details of installed capacity, used capacity and spare capacity, improving transparency and planning.
Cleaner Operations and Climate Push
Environmental responsibility is built into the rules. Companies must prepare time-bound plans to reach zero routine gas flaring and reduce greenhouse gas emissions. This signals a clear push for cleaner and more efficient upstream operations.
Faster Decisions and Fair Disputes
Lease applications must be decided within 180 days, helping projects move faster. Dispute resolution is investor-friendly. Arbitration will be in New Delhi if all parties are Indian. If a foreign company is involved, a neutral international seat can be chosen.
Safety, Reporting and Industry Response
Offshore safety oversight is strengthened by naming the Oil Industry Safety Directorate as the key authority. Companies must report discoveries, submit development plans on time and regularly update production and compliance norms.
