Page 40 - Policy Economic Report - July 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

public health. The growing market capitalization of Oil & Gas PSUs—nearly doubling to ?8.79 lakh crore
since 2014—reflects the sector’s robust performance and the trust of investors.

Looking ahead, the Minister called on chartered accountants to embrace artificial intelligence and
advanced analytics, automating routine tasks to focus on strategic advisory roles and harnessing data-
driven insights for more effective decision-making. “Embracing AI is no longer optional—it is essential for
staying competitive and innovative in today’s evolving financial world,” he noted.

In closing, Shri Puri urged the ICAI community to uphold transparency, efficiency, and accountability as
India marches towards a developed nation by 2047. “On this special day, remember that your profession
has the power to protect and sustain our economy. Your dedication is vital for building Viksit Bharat.”

Pathbreaking Reforms in Petroleum & Natural Gas Sector: Draft PNG Rules aims modernisation of
India’s upstream oil and gas framework

“As part of our focus to accelerate oil & gas exploration under the leadership of Prime Minister Shri
Narendra Modi Ji, we are bringing in a series of pathbreaking policy reforms to promote exploration and
production. These reforms, including the Draft Petroleum & Natural Gas Rules, 2025, will significantly
enhance the ease of doing business for our E&P operators,” said Shri Hardeep Singh Puri, Minister of
Petroleum and Natural Gas. The Minister urged all stakeholders—industry leaders, experts, and citizens—
to share their feedback on the Draft Petroleum & Natural Gas Rules, the revised Model Revenue Sharing
Contract (MRSC) and the updated Petroleum Lease format by 17th July 2025 at png-
rules@dghindia.gov.in.

The Draft Petroleum & Natural Gas Rules, 2025, aim to modernise India’s upstream oil and gas framework
with several major reforms. Key among them is the introduction of an investor-friendly stabilisation
clause, designed to protect lessees from adverse impacts of future legal or fiscal changes, such as
increases in taxes, royalties or other levies, by allowing compensation or deductions. To reduce
infrastructure duplication and encourage smaller players, the draft mandates that lessees declare
underutilised capacity in pipelines and other facilities, and provide third-party access on fair terms, subject
to government oversight.

For the first time, the draft rules permit operators to undertake integrated renewable and low-carbon
projects—including solar, wind, hydrogen, and geothermal energy—within oilfield blocks, provided they
meet safety standards and do not interfere with petroleum production. Strengthening environmental
stewardship, the draft introduces detailed requirements for monitoring and reporting greenhouse gas
emissions, establishes a regulatory framework for carbon capture and storage (CCS), and mandates site
restoration funds with post-closure monitoring for a minimum of five years.

In terms of data governance, all operational data and physical samples generated during exploration and
production will belong to the Government of India. Lessees can use this data internally, but any export or
external use requires government approval, with confidentiality protections lasting up to seven years. The
draft rules also propose the creation of a dedicated Adjudicating Authority, not below the rank of Joint
Secretary, empowered to enforce compliance, resolve disputes, and impose penalties. Additional

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