OILFIELDS ACT 1948 (Syllabus: GS Paper 3 – Economy)

Context: The Ministry of Petroleum & Natural Gas (MoPNG) introduced a Bill in Parliament to amend the Oilfields (Regulation and Development) Act, 1948.

Oilfields (Regulation and Development) Act, 1948

• Scope of Act: Focuses on the regulation and development of traditional 'mineral oils' as commonly defined.
• Proposed Amendment: Aims to update the definition of 'mineral oil' to include future alternative or clean energy sources.
• Objective: Facilitates the development and production of emerging clean energy technologies.

Key features of the Bill

• Expanded Definition of Mineral Oils: The Act defines mineral oils to include petroleum and natural gas, excluding coal, lignite, and helium. The Bill expands this definition to cover:

o Any naturally occurring hydrocarbon

o Coal bed methane

o Shale gas/oil

• Introduction of Petroleum Lease: The Act initially provides for a mining lease covering exploration, prospecting, production, and disposal of mineral oils. The Bill replaces this with a petroleum lease, encompassing similar activities. Existing mining leases remain valid.
• Penalties for: Undertaking mineral oil activities (exploration, prospecting, production) without a valid lease and Non-payment of royalty.
• Adjudication of Penalties: An officer of the rank of Joint Secretary or above will be appointed by the central government for adjudicating penalties. 

o Appeals will be heard by the Appellate Tribunal specified in the Petroleum and Natural Gas Regulatory Board Act, 2006, which is the Appellate Tribunal for Electricity constituted under the Electricity Act, 2003.