Govt Drafts Rules Granting Pre-emption Rights Over Oil, Gas in National Emergencies

The Central government has framed draft rules under the revamped Oilfields (Regulation and Development) Act, granting it pre-emption rights over all crude oil and natural gas produced in India during a national emergency.

These rules empower the government or existing shareholders to claim oil, gas, or related products before anyone else, ensuring public interest is safeguarded.

Producers will be compensated at the prevailing fair market price. Though the term “national emergency” remains undefined, events like war or natural disasters are expected triggers.

The draft rules also provide for oil and gas operators being exempt from their obligations under the Act in force majeure conditions.

The Ministry of Petroleum and Natural Gas has also invited public comments on drafts.