India’s oil and gas sector is entering a decisive era. From ambitious plans for refining capacity to the biggest round so far of the Open Acreage Licensing Policy (OALP), and far-reaching regulatory changes, the industry is being transformed to balance both local energy requirements and international investment standards.
Though driven by economic and technical objectives, these developments create a new legal landscape in which upstream contracts, foreign investment structures, and environmental compliance will need to be reconsidered.
Refining Capacity: Ambition Meets Reality
Seven years ago, in 2017–18, India laid down an aggressive plan: raise aggregate refining capacity from approximately 245 million metric tonnes per year (MMTPA) to 414 MMTPA by 2025. Today, real capacity is about 258 MMTPA, a mere 5% increase.
The causes are well known to observers of the industry: land acquisition hurdles, COVID-induced issues, changing international patterns of demand, and a risk-averse investment environment. Premier ventures such as Indo-Saudi (60 MMTPA), expansion by Nayara Energy (25 MMTPA), Reliance Industries proposed 7.5 MMTPA expansion, and Indian Oil Corporation’s (IOC) planned 34 MMTPA expansion have all been delayed.
But the tale is very much on the move. Government estimates now point to a capacity of approximately 309 MMTPA by 2028, underpinned by public sector expansions, private-sector upgrades, and greenfield complexes like the HRRL refinery in Rajasthan.
OALP Round 10: The Largest Exploration Push So Far
In February 2025, the Petroleum Minister Hardeep Singh Puri inaugurated the 10th round of bidding for OALP, the flagship policy of India’s Hydrocarbon Exploration and Licensing Policy (HELP). The round is unprecedented in size: 25 blocks of about 191,986 square kilometres, the largest since OALP commenced.
The expansion spans 13 sedimentary basins – onshore, shallow water, deep water, and ultra-deep-water blocks. The one standout feature is that 16 of them, approximately 98,000 sq km, are in what were earlier deemed “No-Go” zones. Their re-designation is a definite policy shift in exploration’s favour, strengthened by technology and environmental guarantee measures.
The OALP and HELP models are a radical shift from the previous production sharing agreements to a revenue-sharing format with added marketing and pricing liberty for the operators. The model agreements are leaner, though still laden with intricate unitisation, data-sharing, and conflict resolution provisions leaving them rich in potential for meticulous legal bargains.
Licensing and Regulatory Reform: Making It Easier to Explore
In May 2025, the government published the Draft Petroleum & Natural Gas Rules 2025, which are intended to modernize upstream regulations. Among the significant provisions is a “stabilisation clause” a contractually assured protection that insulates investors from unfavorable alterations in tax, royalty, or legislative regimes over the term of the lease. For international investors and lenders, such provisions significantly improve predictability.
Earlier this April, the Oilfields (Regulation and Development) Amendment Act, 2025 was brought into force, streamlining scattered approvals into single petroleum leases, bringing Indian practice into line with international standards.
The sheer weight of clearance has also been sharply reduced: the number of approvals for exploration has been lowered from 37 to 18. Along with digitalisation of licensing procedures, this is set to shave months off the typical project initiation cycle.
But these reforms also have extra accountability, compulsory greenhouse gas monitoring, restoration site financing, five-year post-closure surveillance, and provision for incorporating clean energy facilities within oil and gas undertakings.
Compliance Toolkit for OALP Round 10 and India’s Upstream Oil & Gas Reforms
With India’s oil and gas industry entering a new chapter with OALP Round 10 and recent upstream licensing reforms, legal teams are discovering that an organized compliance toolkit is no longer a choice it’s necessary. An express checklist ensures compliance for bidders with respect to eligibility, contract variability, and procedural compliance before deadlines, and also neglects a risk map that identifies areas of possible issues such as a lack of cross-border conformance or investment, emerging ESG regulations, and slow-downs in regulation, compliance, and compliance resources. Stabilisation clauses, certain policies in India, reduced clearance thresholds and new commitments to compliance mean opportunity on a vast level (as well as compliance risks), are of a level never before seen.
Beyond 2025: A More Competitive, Transparent Landscape
These reforms have a clear trajectory – increase exploration in India, decrease import reliance, and build a competitive, globally-relevant, oil industry. If OALP ever continues to develop blocks of substantial acreage each year, coupled with legislative stability, and year-on-year improvement of fiscal arrangements then India may no longer be a refining hub, but move towards a sustainable exploration-production model.
To summarize, in 2025 India’s oil and gas sector is less about additional blocks and increased refining capacity than it will be about regulation, approval timelines, and transparency.
Disclaimer: The information published in the above newsletter is collected from various sources in electronic medium and analyzed by the firm. The reader is advised to consult the attorney qualified in their jurisdiction, before acting on any information contained in this newsletter. India Juris excepts no liability what so ever in this regard.
