This approval marks the culmination of a series of transformative reforms undertaken under the leadership of the Hon'ble Prime Minister to strengthen India's hydrocarbon exploration and production sector.
India is the world's third-largest consumer of crude oil, with an annual import bill of nearly USD 144 billion (approximately ₹13 lakh crore). As recent geopolitical developments have demonstrated, secure and uninterrupted access to energy resources is of strategic importance for a rapidly growing economy.
With India's energy demand expected to rise steadily in the coming decades, enhancing domestic oil and gas production is essential for reducing import dependence, strengthening energy resilience, and securing the nation's long-term economic growth.
Fig 1: Advanced Seismic Surveys Unlock India's Offshore Potential.
Since 2014, the Government has undertaken a series of structural reforms over the past few years to create an enabling ecosystem for hydrocarbon exploration and production.
Opening Up Offshore Acreage: More than 99% of the earlier "No-Go" areas have been removed, making over one million square kilometres of India's Exclusive Economic Zone available for exploration for the first time.
Modernising the Contractual Regime: India transitioned from Production Sharing Contracts to Revenue Sharing Contracts, simplifying the fiscal framework and improving transparency while reducing administrative intervention.
Legislative Reforms: The Oilfields (Regulation and Development) Amendment Act, 2025 modernised the legal framework governing the sector by providing contractual stability, recognising integrated petroleum operations, strengthening dispute resolution mechanisms, and establishing a contemporary regulatory architecture.
Implementation Through New Rules: The Petroleum and Natural Gas Rules, 2025 operationalised these reforms by promoting ease of doing business, improving regulatory efficiency, and streamlining the administration of petroleum leases.
Uniform Decision-Making Framework: The Government has also standardised the composition and mandate of the Empowered Committee of Secretaries across all contract regimes, ensuring consistency and a level playing field for all operators, irrespective of when their contracts were signed.
Sharper Focus on Exploration: The performance parameters of ONGC and Oil India have been reoriented to place greater emphasis on exploration activities, reinforcing the Government's commitment to expanding India's domestic hydrocarbon resource base.
Earlier Offshore Areas Restricted for Exploration Nearly 99% of India's EEZ Now Open for exploration.
Hydrocarbon exploration is a capital-intensive and long-gestation activity, with a typical period of 5-10 years from the award of an exploration block to the commencement of commercial production. This underscores the need for sustained exploration to meet India's growing energy demand.
Further, existing oil and gas fields witness a natural production decline of around 6-7% every year, making continuous exploration and new discoveries essential to sustain domestic hydrocarbon production.
