USISPF praised Union Petroleum and Natural Gas Minister Hardeep Singh Puri for his leadership in driving the crucial reforms. / USISPF

The US-India Strategic Partnership Forum (USISPF) has hailed the passage of The Oilfields (Regulation and Development) Amendment Bill, 2024 as a “transformative step” in India's energy sector, praising Union Petroleum and Natural Gas Minister Hardeep Singh Puri for his leadership in driving the crucial reforms.

The Bill, which amends the Oilfields (Regulation and Development) Act of 1948, aims to resolve one of the biggest grievances of global oil companies interested in investing in India by providing stability in operations, both in terms of tenure of the lease and conditions therein. It emphasizes efficient alternate dispute resolution mechanisms which will ensure disputes can be resolved in a timely, fair and cost-effective manner.

"The US-India Strategic Partnership Forum (USISPF) congratulates Hon'ble Minister Shri Hardeep Singh Puri on the historic passage of The Oilfields (Regulation and Development) Amendment Bill, 2024. This landmark legislation marks a transformative step toward enhancing India's energy security and attracting global investment in upstream exploration," the organization said in a statement.

The bill also aims to strengthen domestic oil and gas production, reducing dependence on imports.

The amendment broadens the definition of mineral oils to include hydrocarbons such as crude oil, natural gas, petroleum, condensate, coal bed methane, shale gas, and oil. The Bill also replaces the term mining leases with petroleum leases, which will now govern exploration, production, and disposal activities. 

Previously, violations of the Oilfields (Regulation and Development) Act, 1948 could result in imprisonment of up to six months or a fine of $11.50 (₹1,000), or both. The new Bill removes imprisonment as a penalty, replacing it with financial fines, raising the maximum penalty to $28740.67 (Rs 25 lakh). Additionally, continued violations could attract an extra fine of up to $11496.27 (Rs 10 lakh) per day, shifting enforcement from criminal prosecution to financial deterrence.

Minister Puri, highlighting the significance of the bill, called it a "historic day" for India’s energy security and self-sufficiency. "Far-reaching amendments made in the existing legislation will further strengthen and propel India’s energy sector under the leadership of PM Modi Ji, and ensure policy stability, international arbitration, extended lease periods, etc.," Puri wrote on X (formerly Twitter).

The USISPF underscored that the reforms would enable advanced technology partnerships in shale gas, coal bed methane (CBM), and green energy initiatives like carbon capture, utilization, and storage (CCUS). "Provisions for international arbitration and decriminalized penalties further bolster confidence for FDI inflows," the statement read.

USISPF praised the Indian government’s commitment to "cooperative federalism and streamlined regulations," which it said would encourage U.S. energy firms to deepen collaboration with India's hydrocarbon sector.

Puri pointed to the increasing energy demands of a growing economy, noting that India's crude oil consumption had risen from 5 million barrels per day three and a half years ago to 5.5 million barrels today. "If we continue to grow at the rate at which we are, we will go up to 6.5-7.0 million barrels per day," he said, adding that energy consumption is a key indicator of economic performance.

The minister also highlighted India's push to open up previously restricted exploration areas. "Earlier, one million square kilometers of our sedimentary basin used to be a ‘No Go’ area. As a result, our import dependence was on the rise. We opened up that one million square kilometers out of the 3.5 million square kilometers of sedimentary basin to encourage and enhance domestic crude production. This has sent positive signals to prospective investors. Seventy-six percent of total area under exploration has come under active exploration only since 2014," he said.

USISPF concluded by saying that this reform “underscores India's readiness to accelerate domestic production, reduce import dependence, and strengthen its role as a strategic energy partner.”

“We look forward to supporting bilateral efforts to unlock India's vast resource potential and advance shared goals of US-India energy growth,” USISPF concluded.