India Amends Petroleum and Natural Gas Rules to Boost Exploration

On December 11, 2025, the Union Minister for Petroleum and Natural Gas announced significant amendments to the Petroleum and Natural Gas Rules, 2025. The changes aim to strengthen India’s exploration and production ecosystem and enhance energy security.

One of the most notable reforms is the introduction of a single petroleum lease granting broader rights to companies. This will allow lessees to undertake all mineral oil operations without seeking separate permissions, including decarbonisation projects and integrated energy initiatives.

Key Features of the Amendments

The revised rules introduce a 180-day deadline for deciding petroleum lease applications, ensuring faster approvals. Companies can now obtain long-term leases of up to 30 years, extendable to the economic life of the field, enabling structured investment planning.

Mandatory annual declarations of installed, utilised, and excess infrastructure capacity have been introduced to promote joint development and shared use of facilities. Additionally, standardised lease formats will ensure uniformity and ease of administration across the sector.

Arbitration and Compliance Norms

The amendments specify that New Delhi will be the seat of arbitration for disputes involving only Indian companies, while contracts with foreign entities may opt for a neutral seat. Strict compliance obligations have been introduced, including timely reporting of discoveries, submission of field development plans, and government approvals for development areas.

Companies must also provide regular updates on production activities and adhere to time-bound plans for reducing greenhouse gas emissions. Penalties for violations have been significantly raised to ₹25 lakh, with continuing contraventions attracting ₹10 lakh per day.

Impact On Industry and Investment

Industry experts believe the reforms will accelerate domestic exploration and production activities by reducing procedural delays and providing regulatory clarity. The introduction of long-term leases and standardised formats is expected to attract structured investments in the sector.

Enhanced compliance and environmental norms will ensure responsible operations while supporting India’s energy transition. The amendments mark a significant step toward creating a more efficient and transparent regulatory framework for the petroleum and natural gas industry.

Read More: Crude Oil Prices Edge Higher.

Conclusion

The landmark changes to the Petroleum and Natural Gas Rules, 2025, reflect India’s commitment to boosting energy security and promoting sustainable practices. By simplifying lease processes, introducing strict compliance norms, and encouraging decarbonisation, the government aims to create a robust and future-ready energy ecosystem.

These reforms are expected to improve investor confidence and accelerate the pace of domestic exploration and production. The new framework positions India to meet growing energy demands while aligning with global sustainability standards.

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