Can the Petroleum and Natural Gas Rules, 2025, replace regulatory uncertainty with execution certainty in India’s upstream oil and gas sector?
Can the Petroleum and Natural Gas Rules, 2025, replace regulatory uncertainty with execution certainty in India’s upstream oil and gas sector?
The Petroleum and Natural Gas Rules, 2025, aim to transform India's upstream oil and gas sector by shifting from a permissions-driven to an execution-led framework. By consolidating leases and streamlining approvals, the Rules enhance regulatory certainty, reduce project delays, and improve investment conditions, potentially boosting domestic production and reducing import reliance.
By introducing a single petroleum lease covering exploration, development, and production, including unconventional hydrocarbons, the Rules eliminate fragmented approvals and sequential licensing
The Petroleum and Natural Gas Rules, 2025, mark a structural shift in India’s upstream regime, from permissions-driven oversight to execution-led certainty. By introducing a single petroleum lease covering exploration, development, and production, including unconventional hydrocarbons, the Rules eliminate fragmented approvals and sequential licensing. Long lease tenures of up to 30 years, extendable to the economic life of a field, align regulatory certainty with investment horizons, addressing one of the biggest sources of upstream risk.
Execution certainty is reinforced through a mandatory 180-day timeline for lease approvals, a critical improvement for capital-intensive projects where delays materially impact project viability. Investor-grade dispute resolution mechanisms, including arbitration, and clear continuity provisions for safe handover, reduce policy and contractual ambiguity. Together, these measures shorten the gap between capital deployment and production, an area where India has historically underperformed.
Project economics also improve through explicit provisions enabling shared and joint development of infrastructure such as pipelines, processing facilities, and offshore logistics. This lowers capital duplication and per-barrel development costs, particularly for marginal and mature fields. The replacement of criminal penalties with clearly defined financial sanctions creates a predictable enforcement environment, improving bankability and lender confidence.
While the Rules do not directly influence retail fuel prices, they can deliver indirect consumer and macroeconomic benefits. Higher domestic production reduces import dependence and exposure to global volatility, while improved availability of domestic natural gas supports price stability for power, fertilisers, and industry. Overall, the Petroleum and Natural Gas Rules, 2025 represent a decisive move towards execution certainty, lowering regulatory friction, accelerating project timelines, and strengthening India’s upstream investment climate.
(The author is CEO and co-founder, Teamlease Regtech. Views are personal.)