Hydrocarbon Law in India

Law Library

Regulatory Bodies

The Directorate General of Hydrocarbons (DGH)[1993]

DGH has been entrusted with several responsibilities like implementation of New Exploration Licensing Policy (NELP), matters concerning the Production Sharing Contracts for discovered fields and exploration blocks, promotion of investment in E and P Sector and monitoring of E and P activities including review of reservoir performance of producing fields. In addition, DGH is also engaged in opening up of new unexplored areas for future exploration and development of non-conventional hydrocarbon energy sources like Coal Bed Methane(CBM) as also futuristic hydrocarbon energy resources like Gas Hydrates and Oil Shales

THE PETROLEUM AND NATURAL GAS REGULATORY BOARD

The Petroleum and Natural Gas Regulatory Board (PNGRB) was constituted under The Petroleum and Natural Gas Regulatory Board Act, 2006 (NO. 19 OF 2006) notified via Gazette Notification dated 31st March, 2006.

The Act provide for the establishment of Petroleum and Natural Gas Regulatory Board to protect the interests of consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas and to promote competitive markets and for matters connected therewith or incidental thereto.

Further as enshrined in the act, the board has also been mandated to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas so as and to ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country.

APPEALS TO APPELLATE TRIBUNAL

30.Appellate Tribunal :-

(1) Subject to the provisions of this Act, the Appellate Tribunal established under section 110 of the Electricity Act, 2003 (36 of 2003) shall be the Appellate Tribunal for the purposes of this Act and the said Appellate Tribunal shall exercise the jurisdiction, powers and authority conferred on it by or under this Act : Provided that the Technical Member of the Appellate Tribunal for the purposes of this Act shall be called the Technical Member (Petroleum and Natural Gas) and shall have the qualifications specified in subsection (2) of section 31.

(2) Notwithstanding anything contained in the Electricity Act, 2003 (36 of 2003), the Central Government may, for the purposes of this Act, appoint one or more Technical Members (Petroleum and Natural Gas) on the Appellate Tribunal for Electricity or designate a Technical Member of the said Tribunal having the qualifications specified in sub-section (2) of section 31 and when a Technical Member (Petroleum and Natural Gas) is appointed, he shall be in addition to the three other members appointed under the said Act.

Coal Bed Methane (CBM)

Coalbed Methane (CBM), an unconventional source of natural gas is now considered as an alternative source for India’s energy resource. India has the fifth largest proven coal reserves in the world and thus holds significant prospects for exploration and exploitation of CBM. The prognosticated CBM resources in the country are about 92 TCF (2600 BCM) in 12 states of India. In order to harness CBM potential in the country, the Government of India formulated CBM policy in 1997 wherein CBM being Natural Gas is explored and exploited under the provisions of OIL Fields (Regulation & Development) Act 1948 (ORD Act 1948) and Petroleum & Natural Gas Rules 1959 (P&NG Rules 1959) administered by Ministry of Petroleum & Natural Gas (MOP&NG).

Important statutes

The Petroleum Act,1934

Petroleum Rules,1976

The Petroleum Pipelines Act,1962

The Oil Industry Act,1974

THE PETROLEUM AND NATURAL GAS REGULATORY BOARD ACT, 2006 NO. 19 OF 2006

(Eligibility Conditions for Registration of Liquefied Natural Gas Terminal) Rules,2012

THE OILFIELDS (REGULATION AND DEVELOPMENT) ACT, 1948

An Act to provide for the regulation of oilfields and for the development of mineral oil resources

RATES OF ROYALTY[(w.e.f. 1-1-1968]
1. Crude oil: Rupees sixty-one per metric tonne.
2. Casing-head condensate: Rupees sixty-one per metric tonne.
3. Natural gas: Ten per cent. of the value of the natural gas obtained at well-head.

The petroleum and natural gas rules, 1959[pdf]

THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951[pdf]

Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976[pdf]

The sovereignty of India extends and has always extended to the territorial waters of India (hereinafter referred to as the territorial waters) and to the seabed and subsoil underlying, and the air space over, such waters.

FDI Policy for Petroleum & Natural Gas Sector

The present Foreign Direct Investment (FDI) policy for the Petroleum and Natural Gas Sector is laid down by para 6.2.4.2 of Circular 6 of 2013 issued on 22.08.2013 by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.

The sectoral policy/ regulations applicable for refining and marketing activities in India are as follows:

Statutes governing industrial production, viz The Industries (Development And Regulation) Act, 1951, and rules framed thereunder, and the Petroleum Act, 1934, which relate to import, transport, storage, production, refining and blending of petroleum.

The marketing regulations prescribe that for gaining marketing rights for transportation fuel by the private investors, including for foreign investment, a threshold of investment (Rs.2000 crore) should have been made and/ or be committed to make A number of specific product-wise regulations and rules framed under the Petroleum Act, 1934, all of which have a thrust on controlling adulteration and ensuring quality of the product.

Future Ahead

INDIA HYDROCARBON VISION -2025[pdf]

Petroleum Minister releases Hydrocarbon Vision 2030 for North-East

The Minister of State (IC) for Petroleum and Natural Gas Shri Dharmendra Pradhan today released the Hydrocarbon Vision 2030 for north-east India, outlining steps to leverage the hydrocarbon sector for development of the region in Guwahati. Ministry of Petroleum and Natural gas (MoPNG) has consciously and constantly focused efforts towards making hydrocarbons a tool to enable social and economic development. One such initiative has been the Hydrocarbon Vision 2030 for North East Region.

Important Links