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The new Oil Field Amendment Bill 2024 has relaxed regulations for making small oil fields lucrative for investors. Under the provisions of the bill, the Discovered Small Fields (DSF) now gets several investor-friendly liberalised terms which are aimed at making operations more efficient and profitable.
For discovered small oil fields, the bill allows for 100 per cent foreign participation, greater exploration flexibility, and improved financial terms with no cess in line with India's Hydrocarbon Exploration and Licensing Policy (HELP). The new policy is designed to attract both domestic and international investment for DSF, ensuring increased production and efficiency in India's oil and gas sector. Allowance of participation from foreign companies and joint ventures is expected to bring in advanced technology and expertise from global players for DSFs Another major benefit to DSFs is the freedom in marketing and pricing, which allows companies to set their own prices and sell their output freely in the market. This move is expected to create a more competitive and profitable oil and gas industry in India. Additionally, the removal of the upfront signature bonus eliminates initial financial barriers for investors, making it easier for new entrants to participate. One of the most crucial policy change for DSF is the permission for continuous exploration throughout the contract period. Earlier, exploration was restricted to a specific timeline, limiting companies' ability to maximize resource extraction. With this amendment, companies can continue exploration activities, potentially increasing the discovery of hydrocarbon reserves. To further ease financial pressures, the bill aligns royalty rates with the HELP policy and removes the Cess on production, reducing operational costs and improving overall profitability for investors. The DSF policy has already led to substantial progress in India's oil and gas sector. As of February 2025, the policy has contributed to the development of multiple fields, attracting billions in investment and improving domestic hydrocarbon production. India's total hydrocarbon resources under the DSF policy stand at ~162 million metric tonnes of oil equivalent (MMTOE). The policy has attracted an expected investment of ~USD 2.9 billion USD, demonstrating strong investor confidence in the sector. 29 new players have entered the market through DSF rounds, while 56 active contracts are currently operational, driving higher production levels. In terms of production, the cumulative oil output under the DSF policy has reached ~0.107 MMT (Million Metric Tonnes), while cumulative gas production has been recorded at ~0.214 BCM (Billion Cubic Meters) as of February 2025. These figures indicate a steady increase in production levels, positioning India as a growing player in the global energy market. With the Oil Field Amendment Bill 2024, the government aims to accelerate domestic energy production, reduce dependency on imports, and attract global investors to India's oil sector. The policy changes are expected to enhance production efficiency, introduce cutting-edge technology, and strengthen India's energy security. (ANI)
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