Centre approves participating interest transfer among existing oil, gas contractors through management committee nod

Time of India

3 days ago

New Delhi: The government has approved a key recommendation allowing participating interest (PI) transfer among existing parties in
oil and gas contracts
through the Management Committee (MC) instead of the current requirement of prior government approval, subject to no change in operatorship.
The move applies to
Production Sharing Contracts
(PSC), Revenue Sharing Contracts (RSC), Discovered Small Fields (DSF), and Coal Bed Methane (CBM) regimes, and is aimed at reducing project delays and easing operations for existing contractors.
"Participating Interest (PI) means, in respect of each party constituting the contractor, the undivided share expressed as a percentage of such party's participation in the rights and obligations under the contract."
A letter dated July 10 to the Directorate General of Hydrocarbons stated that the recommendation made by the joint working group in June has been 'approved.'
The group had proposed that the Management Committee may be empowered to approve PI transfer cases 'where contractor intends to transfer the PI within the existing parties of the contract, subject to no change in operatorship.'
The recommendation noted that under current provisions, PI transfer within the existing parties required prior government consent, involving comprehensive technical, financial, and legal due diligence for each case. It stated that since the PI holders have already undergone verification at the contract award stage, such evaluation may be foregone.
'Further, in many cases it has been observed that internal transfer approval can take up to six months of time-period, leading to significant project delays,' the working group on ease of doing business in the Indian upstream sector said.
The government has maintained that PI holders will still need to comply with all existing conditions of the contract.
The measure comes as part of broader reforms aimed at increasing investor interest and reducing import dependency, with India targeting exploration of 2.5 lakh square kilometres under the 10th round of the Open Acreage Licensing Policy (OALP).
As part of its upstream reforms, the Ministry of Petroleum and Natural Gas has also released the Draft Petroleum & Natural Gas Rules, 2025, for public consultation. The draft proposes a stabilisation clause to protect lessees from adverse fiscal or legal changes by allowing compensation or deductions. Stakeholder feedback is invited by July 17.
The draft rules also propose mandatory declaration of underutilised pipeline and facility capacity to facilitate third-party access under government oversight.
In March 2025, amendments to the Oilfields (Regulation and Development) Act, 1948 were notified to further streamline operations and attract investment in exploration and production.
During his visit to Vienna for the 9th OPEC International Seminar earlier this week, Union Minister Hardeep Singh Puri met Shell CEO Wael Sawan, bp CEO Murray Auchincloss, and Vitol Group CEO Russel Hardy, where he highlighted India's push to increase domestic oil and gas production.
In another development, the ministry approved open sharing of National Data Repository (NDR) data at zero charge for micro, small and medium enterprises (MSMEs), startups and academic institutions. The joint working group also recommended integrating NDR data with those of ONGC, OIL, Ministry of Mines, Ministry of Coal, Ministry of Earth Sciences, and Central Ground Water Board.
The measure is aimed at promoting knowledge sharing and technological development through access to comprehensive datasets, including seismic, well and other geological data.