In December 2025, the Government of India (GoI) notified the new ‘Petroleum and Natural Gas (P&NG) Rules, 2025’, introducing a revised regulatory framework designed to attract investment and simplify operations in India’s oil and gas sector. The announcement was made by Union Minister Hardeep Singh Puri, Ministry of Petroleum and Natural Gas (MoPNG).
Exam Hints:
- What? GoI Notified P&NG rules, 2025
- Announced by: Union Minister Hardeep Singh Puri, MoPNG
- Legal Basis: Oilfields (Regulation and Development) Act, 2025
- Old Rules Replaced: Petroleum Concession Rules, 1949 & P&NG Rules, 1959
- Key Features:
- Single Licence: One petroleum lease replaces multiple licences
- Lease Tenure: Up to 30 years
- Faster Approval: Within 180 days
- Penalties: Financial penalty of Rs.25 lakh + Rs.10 lakh per day for non-compliance
- Competent Authority: Oil Industry Safety Directorate (offshore safety)
Highlights of New Framework:
Legal Basis The GoI,exercising the powers conferred under Sections 5 and 6 of the Oilfields (Regulation and Development) Act, 2025, has notified new rules governing the grant of petroleum leases over mineral oils owned by the Government, replacing the Petroleum Concession Rules, 1949 and the Petroleum and Natural Gas Rules, 1959.
Single Licence: Under the new framework, companies will now operate through a single petroleum lease replacing the earlier system of multiple licences.
- The single-lease system simplifies procedures by reducing red tape and enables lessees to manage all stages of hydrocarbon operations under a single authorisation.
Lease Tenure: The new framework provides lease tenures of up to 30 years and be extended for the full economic life of a field.
Financial Penalties: Criminal penalties for violations have been eliminated and replaced with higher financial penalties of Rs 25 lakh, with an additional Rs 10 lakh per day for continued non-compliance.
Dispute Resolution: The rules provide a faster and investor-friendly dispute resolution system. Foreign companies can choose a neutral place for arbitration, while disputes between Indian companies will be settled in New Delhi(Delhi), ensuring clarity and confidence for investors.
Compliance and Reporting Requirements: The rules mandate timely reporting of all discoveries, submission of field development plans within set deadlines, prior central government approval for development areas, and regular updates on development and production activities.
Infrastructure Sharing: The rules permit operators to share or jointly develop pipelines, processing units, and other facilities to cut costs and accelerate development. Operators must also annually report installed, utilised, and spare capacity to enhance transparency and planning.
Faster Approval: The new rules also stipulate a time limit on approvals. Applications for petroleum leases must be decided within 180 days, ensuring timely approvals.
Zero Flaring: Environmental provisions have mandated time-bound plans for zero gas flaring and reduced greenhouse emissions.
Competent Authority: The Oil Industry Safety Directorate, under the MoPNG, has been designated as the competent authority for offshore safety, audits and standard-setting across exploration and production activities.
About Ministry of Petroleum & Natural Gas (MoPNG):
Union Minister – Hardeep Singh Puri (Rajya Sabha- Uttar Pradesh, UP)
Minister of State (MoS) – Suresh Gopi (Constituency – Thrissur, Kerala)
