The Oilfields (Regulation and Development) Amendment Act, recently passed by the Parliament marks a decisive turn in India’s management of petroleum and mineral-oil resources. Framed as a set of reforms to boost efficiency and domestic production, it in fact clears the path for large-scale privatisation: state control is cut back, environmental safeguards are loosened, and public-sector enterprises lose their historic primacy.
Foremost among the changes is the renaming of “mining leases” as “petroleum leases.” Whereas the former were governed by a detailed auction and oversight regime, the new category carries far fewer procedural checks, allowing private and foreign companies to acquire, transfer or aggregate leases with minimal transparency. The Amendment also streamlines lease assignments, transfers and sub-leasing, all but guaranteeing a flood of corporate capital into once-public assets.
Equally troubling is the Act’s abolition of criminal sanctions for regulatory breaches. Under the 1948 Act, serious offences—such as unauthorised boundary extensions, safety lapses or environmental violations—entailed penal liability for company officers. The Amendment replaces these with civil penalties alone, effectively institutionalising a “pay-and-proceed” approach that treats fines merely as a cost of doing business.
By recasting “mineral oils” as an exclusively Union subject, the legislation strips state governments of their power to regulate, tax and oversee extraction within their own territories. States have traditionally derived substantial revenues from royalties, sales levies and cess; under the new scheme, those revenues accrue instead to New Delhi or to private leaseholders. This centralisation undermines cooperative federalism, deprives resource-rich regions of fiscal autonomy and weakens local accountability for environmental and social protection.
The Amendment builds upon earlier pro-corporate frameworks—most notably the New Exploration Licensing Policy (NELP, 1997) and the Hydrocarbon Exploration and Licensing Policy (HELP, 2016)—but discards even their modest safeguards for public-sector undertakings (PSEs). Enterprises such as ONGC and Oil India Ltd have long carried out the riskiest upstream work—preliminary surveys, seismic studies and exploratory drilling—only to cede the bulk of commercial gains to private consortia. For example, ONGC first confirmed hydrocarbon reserves in the Krishna–Godavari (KG) Basin in 1983; yet Reliance Industries Ltd and its partners realised the largest profits during later production phases. A similar case is the Panna–Mukta oilfields in the Gulf of Khambhat: although ONGC carried out the initial discovery and bore the full exploration risk, the 1994 production-sharing contract awarded ONGC only a 40 per cent stake, leaving Reliance Industries and BG Exploration & Production (formerly Enron) with the remaining 60 per cent. As a result, the Reliance-led consortium now captures the majority of operating revenues and profit shares from these fields. Furthermore, the Directorate General of Hydrocarbons in 2017 earmarked 149 “small and marginal” ONGC fields (aggregate reserves ~791 million tonnes crude, 333 billion m³ gas) for auction to private and foreign firms, on the premise that specialised operators could boost production.
Allegations of corporate rent-seeking in the KG-D6 block illustrate the risks ahead. Reliance’s KG-D6 concession, once India’s largest gas discovery, was projected to yield 80 million m³/day (cubic metres of gas per day) at peak. By 2013, actual output had fallen below 15 million m³/day—an under-production documented in Gas Wars by Paranjoy Guha Thakurta, Subir Ghosh and Jyotirmoy Chaudhuri, which argues that RIL deliberately throttled output to force higher gas prices. A Comptroller and Auditor General report later criticised “gold-plating” of costs by nearly US $6 billion, thereby delaying profit-sharing and inflating the company’s price requests.
This Amendment forms part of a broader corporate-driven energy strategy under the Modi government. In the nuclear sector, proposed amendments to the Atomic Energy Act, 1962 and related liability legislation would permit private manufacture of reactor components and joint ownership of nuclear plants alongside NPCIL—a departure from decades of state monopoly. The Electricity (Amendment) Bill, 2022 similarly opens distribution to multiple licence-holders and cross-subsidy pools, enabling private firms to “cherry-pick” high-margin urban areas while leaving loss-making rural grids to flounder. In coal, 100 per cent foreign direct investment is already permitted for commercial mining, drawing conglomerates such as Adani Enterprises into extraction despite environmental and social concerns . Even in renewables, public units like NTPC RE have been sidelined while private giants secure the majority of subsidies and contracts.
The human and ecological stakes could not be higher. With criminal penalties removed, companies face little deterrent against spills, groundwater contamination or habitat destruction. Local authorities—long better placed to judge regional sensitivities—are stripped of enforcement powers. On the labour front, privatisation promises contract-based jobs with lower wages, fewer benefits and weaker safety standards, replacing the stable employment and collective-bargaining rights that PSU workers currently enjoy.
Far from a mere technical overhaul, the Act represents a wholesale transfer of India’s strategic energy assets into private hands. It threatens to deepen regional inequalities, erode national self-reliance and sacrifice both workers’ rights and environmental integrity on the altar of short-term profit.
