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New Petroleum And Natural Gas Rules Notified
The government has notified the Petroleum and Natural Gas Rules, 2025, introducing a modern regulatory framework designed to draw higher investment into India’s oil and gas sector and improve ease of doing business. Issued under the recently enacted Oilfields (Regulation and Development) Amendment Act, 2025, the rules overhaul the licensing regime and replace the older system of multiple permissions with a single petroleum lease for exploration, development and production of all hydrocarbons, including shale.
Under the new framework, companies will now operate through a single petroleum lease that covers the entire value chain of mineral oil operations. Lease tenures may run up to 30 years and be extended for the full economic life of a field, giving operators greater certainty to make long-term investment decisions. The rules also ensure protection against adverse changes to terms during the operational period.
Shift From Criminal to Financial Penalties
Criminal penalties have been removed and replaced with stringent financial penalties. Violations may attract a penalty of ₹2.5 million, along with an additional ₹1 million for every day the breach continues. The intent is to modernise the compliance system while avoiding criminal prosecution for operational matters.
Push for Efficiency: Shared Infrastructure and Transparency
Lessees will now be allowed to jointly develop or share infrastructure by mutual agreement, encouraging cost optimisation and faster field development. Companies must also file an annual declaration with the government detailing their installed, utilised and excess capacity across infrastructure assets.
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