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India sweetens oil block bids with lease reform, arbitration freedom
From the nine iterations of the oil acreage licensing policy (OALP), the major change in the tenth version, due out in August this year, will be twofold. The first of those is the expanded definition of mineral oils to include shale oil, shale gas and coal-bed methane.
The other one is the freedom to pursue international arbitration in the event of disputes, as well as offering a longer lease period for the fields the companies win.
Combined with the removal of windfall tax on domestically produced crude that was in effect since July 2022, prospective bidders now have a realistic chance to make profits from their discovered fields. That all of these changes have come through Parliament is significant, since executive notifications, foreign investors have discovered, could be overturned easily. The expanded definitions and wider rights to arbitration come from the amendment in the Oilfields (Regulation and Development) Act of 1948, passed by both Houses of Parliament by March 2025.
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