Norms for transfer of participating interest among partners in oil, gas eased
Participating interest 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.
Under the current contractual provisions of production sharing contracts (PSC), revenue sharing contracts (RSCs), discovered small fields (DSF) and coal bed methane (CBM), any participating interest or stake transfer within the existing parties requires prior written consent from the government.
This move is part of the government's efforts to boost investors' interest and reduce energy import dependency. India aims to explore 2.5 lakh square km in the 10th round of auctions under the Open Acreage Licensing Policy.
'The Management Committee may be empowered to approve Participating Interest transfer cases where the contractor intends to transfer the PI within the existing parties of the contract, subject to no change in operatorship," said the report of the joint working group in April.
A letter dated 10 July to the Director General of Hydrocarbons noted that the recommendation has been 'approved."
The changes should come into effect at the earliest, as the Directorate General of Hydrocarbons has been asked to take necessary actions based on the ministry's approval. However, no specific timelines were mentioned.
Noting that under the existing contractual provisions of all contracts, participating interest transfer within the existing parties of the contractor requires prior written consent from the government, the joint working group in June had recommended: 'However, this process involves a comprehensive technical, financial, and legal due diligence for each case."
Expediting approval
It added that in such cases, as the participating interest holders have already undergone verification during the contract award stage, evaluation for any change in the participating interest among existing parties of the contract may be foregone. 'Further, in many cases it has been observed that internal transfer approval can take up to six months, leading to significant project delays," the working group had said in its report on issues related to ease of doing business in the Indian upstream sector.
The recommendation aims to expedite the approval process and reduce project delays, thereby promoting transparency and ease of doing business.
'PI holders should be required to comply with all the existing conditions of the contract," the recommendations said.
Although the transfer of participating interest does not require the government's nod, it would need the signature of a government representative.
This move is part of the government's efforts to boost investor interest. Under the 10th round of auction under the Open Acreage Licensing Policy, the government aims to explore 250,000 sq. km and reduce oil import dependence.
The Draft Petroleum and Natural Gas Rules, 2025, for which stakeholders need to give their feedback by 17 July, also 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.
The Oilfields (Regulation and Development) Act, 1948, was amended in March 2025, which is also expected to boost investor interest in the oil and gas exploration and production sector.
Data sharing in India
During his visit to Vienna this week for the 9th Opec International Seminar, the minister for petroleum and natural gas, Hardeep Singh Puri, met several stakeholders in the oil and gas space, including Wael Sawan, chief executive officer (CEO) of Shell; Murray Auchincloss, CEO of bp; and Russel Hardy, Group CEO of Vitol, and spoke of opportunities to invest in the country's oil and gas sector.
Among other recommendations, minister Puri approved open sharing of data from the National Data Repository at zero charge to micro, small and medium enterprises (MSMEs), startups and academic institutions.
"NDR data may be integrated with the repositories of the National Oil Companies (NOCs), such as ONGC and OIL, and other ministries such as ministry of mines, ministry of coal, ministry of earth sciences, Central Ground Water Board, etc. ensuring seamless access to comprehensive datasets, including seismic, well, and other geological information," the recommendations said.
The move aims to promote knowledge sharing, collaborative ventures, and technological advancements through enhanced data accessibility, thereby encouraging innovations in the oil and gas industry.
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