Rajya Sabha Passes Oilfields Act Amendment Bill

4 Dec 2024 , 12:55 PM

According to Petroleum and Natural Gas Minister Hardeep Puri, the Rajya Sabha on Tuesday approved a law that aims to provide international arbitration, policy stability, and longer lease terms to the nation’s oil and gas explorers.

The Rajya Sabha received the bill that aims to alter the Oilfields (Regulation and Development) Act, 1948 during the previous session. Now, the Lok Sabha will need to approve it.

“The proposal seeks to assure the investor that the terms of the lease shall remain stable for the entire duration of the lease and will not be altered to its disadvantage,” Puri said on social media.

In order to safeguard their financial gains from a project, Indian and international explorers have long called for policy stability. The changes will allow the government to draft agreements that can protect explorers against upcoming government initiatives like windfall taxation.

“Amendments propose alternate dispute resolution mechanisms for efficacious dispute resolution methods to Investors’ needs and expectations,” Puri stated.

ExxonMobil and other international oil companies have been calling for a clause allowing arbitration outside of India to settle disputes. Some foreign investors have refrained from participating in India’s exploration licensing rounds due to the lack of policy ambiguity and impartial arbitration.

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