The Government of India has introduced a fresh wave of reforms aimed at modernising the country’s upstream oil and gas sector, following the enactment of the Oilfield (Regulation and Development) Amendment Act, 2025. Announced by the Ministry of Petroleum and Natural Gas, the updated framework is designed to strengthen Ease of Doing Business (EoDB) and create a more investor-friendly regulatory environment. The amended Act has been incorporated into the Petroleum and Natural Gas Rules, reinforcing the government’s push toward greater regulatory clarity and operational flexibility for Exploration and Production (E&P) companies.
To identify challenges and streamline operational procedures in the upstream sector, the government had earlier formed a Joint Working Group comprising key E&P operators and officials. Based on the group’s recommendations, a set of crucial reforms has been approved. These include allowing delivery points both within and outside contract areas, enabling smoother transfer of Participating Interest among existing partners, and improving the field-handover process in Discovered Small Field contracts. These measures are expected to reduce bottlenecks and improve project execution timelines.
India’s broader strategy for hydrocarbon exploration continues under the Hydrocarbon Exploration and Licensing Policy (HELP), launched in 2016. Through the Open Acreage Licensing Policy (OALP), nine bidding rounds have so far awarded 172 exploration blocks spanning 3,78,652 square kilometres. The recently launched OALP Bid Round X is the largest to date under the HELP framework, offering 25 exploration blocks covering nearly 1.92 lakh square kilometres, signalling the government’s intent to accelerate domestic exploration.
HELP’s framework introduces a suite of incentives, including reduced royalty rates, absence of oil cess, a uniform licensing system, a simplified revenue-sharing model and exploration rights across the full contract lifecycle. The policy also offers concessional royalties for early production, eliminates revenue-share bidding in Category-II and Category-III basins except in windfall scenarios, and promotes extended and phased exploration. Additional technical flexibilities such as seismic-only bidding and work-programme swapping aim to encourage participation in less-explored basins. To further incentivise operators, originator marks for Category-II and III basins have been increased.
Alongside HELP, the government has rolled out a series of complementary policies over the past decade to strengthen domestic hydrocarbon output and reduce reliance on imports. These include relaxation and extension initiatives under Production Sharing Contracts, the 2015 Discovered Small Fields Policy, policies supporting Coal Bed Methane development, measures to promote enhanced recovery techniques, and frameworks for unconventional hydrocarbon exploration. A major developmental milestone was the release of nearly one million square kilometres of offshore ‘No-Go’ areas in 2022, unlocking vast regions previously unavailable for exploration.
The Oilfields (Regulation and Development) Amendment Act, 2025, serves as a cornerstone of these reform efforts, modernising India’s upstream governance architecture. Collectively, the updated legal framework, operational reforms and investment incentives under the HELP regime aim to bolster domestic production capabilities and improve India’s long-term energy security at a time of growing global energy volatility.
