Government of India (GoI) Notifies Petroleum and Natural Gas Rules 2025

Key facts

• The Government of India (GoI) has notified the Petroleum and Natural Gas Rules, 2025, under the Oilfields (Regulation and Development) Amendment Act, 2025.
• The new rules replace the system of multiple licenses with a single petroleum lease covering exploration, development, and production of all hydrocarbons, including shale.
• The regulatory framework provides lease tenures of up to 30 years, which are extendable for the full economic life of a field.
• Criminal penalties for violations have been removed and replaced with financial penalties of ₹25 lakh, plus ₹10 lakh per day for continuing breaches.
• Applications for the grant of a petroleum lease must be decided within a time-bound period of 180 days.
• The Oil Industry Safety Directorate (OISD) is designated as the competent authority for offshore safety, audits, and standard-setting in exploration and production operations.
• Environmental provisions mandate time-bound plans for zero gas flaring and reduced greenhouse emissions at oilfields.
• The rules permit lessees to jointly develop or share infrastructure facilities by mutual agreement and require an annual declaration of infrastructure capacity.
• The seat of arbitration for disputes involving foreign companies may be a neutral seat, while New Delhi is the seat for disputes where all lessees are Indian-incorporated companies.