Oil India shares gain 4% after Oilfields bill gets nod in Lok Sabha

Oil India shares have fallen over 12 percent since the start of the year. Oil India shares are currently trading 51 percent lower from its all-time high of Rs 768.

Shares of upstream company Oil India rose as much as 4 percent to Rs 382 on the March 13 trading session after the government cleared a long-pending overhaul of India’s oilfield regulations boosted investor sentiment. It wasn't just Oil India, other companies such as ONGC and RIL also witnessed an uptick.

The Oilfield Amendment Bill, of 2024, seeks to modernize petroleum laws, replacing provisions that date back to 1948. It introduces a distinct ‘petroleum lease,’ separates it from mining regulations, and expands the scope of exploration by redefining ‘oils’ to include a wider range of hydrocarbons. The bill also proposes new dispute resolution mechanisms, including arbitration outside India if required.

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Petroleum Minister Hardeep Singh Puri said the legislation would enhance the ease of doing business, boost investment in oil and gas production, and help unlock India’s hydrocarbon reserves. He emphasized that with conventional energy still playing a critical role, the reforms would encourage fresh exploration efforts without favoring either public or private players.

Originally passed in the upper house in December, the bill is expected to provide greater regulatory clarity and attract investment in India’s oil and gas sector. The market responded positively, with shares of key exploration and production (E&P) firms rising on the news.

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Oil India Limited (OIL), a state-owned enterprise under the Ministry of Petroleum and Natural Gas, stands as India’s second-largest oil and gas company. Specializing in the exploration and production of crude oil, natural gas, and LPG, the PSU holds a prominent position in the country’s energy sector.

Shares of the company closed at Rs 375, higher by 2.37 percent from the last closing price of Rs 367 per share on the NSE. Oil India shares have fallen over 12 percent since the start of the year. Oil India shares are currently trading 51 percent lower from its all-time high of Rs 768.

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