The Offshore Areas Mineral (Development and Regulation) Act, 2002
Administered Ministry: Ministry of Mines
Section
Section 1 Short title and commencement. 2 docs
(1) This Act may be called the Offshore Areas Mineral (Development and Regulation) Act, 2002.
(2) It shall come into force on such date1 as the Central Government may, by notification in the Official Gazette, appoint.
(2) It shall come into force on such date1 as the Central Government may, by notification in the Official Gazette, appoint.
1.15th January, 2010, vide notification no. S.O. 338(E), dated by 11th February, 2010, see Gazette of India, Extraordinary, Part II, sec. 3(ii).
Section 2 Declaration as to expediency of Union control.
It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals in offshore areas to the extent herein after provided.
Section 3 Application.
(1) This Act shall apply to all minerals in the offshore areas including any mineral prescribed by notification under clause (g) of sub-section (1) of section 2 of the Atomic Energy Act, 1962 (33 of 1962) except mineral oils and hydrocarbons related thereto.
(2) Except as otherwise provided in this Act, the provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force in the offshore areas.
(2) Except as otherwise provided in this Act, the provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being in force in the offshore areas.
Section 4 Definitions.
In this Act, unless the context otherwise requires,--
(a) "administering authority" means an authority notified, in the Official Gazette, by the Central Government for the purposes of this Act;
(b) "atomic minerals" means the minerals included in atomic minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957) 1[and the rules made thereunder;]
(c) "Coast Guard" means the Coast Guard constituted under the Coast Guard Act, 1978 (30 of 1978);
1[(ca) "composite licence" means the exploration licence-cum-production lease, which is a two stage operating right granted for the purpose of undertaking exploration operation followed by production operation;
(cb) "dispatch" means removal of minerals or mineral products from the area covered under the production lease and includes the consumption of minerals and mineral products within such area;]
(d) "exploration licence" means a licence granted 2[for the purpose of undertaking exploration operation];
(e) "exploration operation" means any operation undertaken for the purpose of exploring, locating or proving the mineral deposits;
1[(ea) "Government company" shall have the meaning assigned to it in clause (45) of section 2 of the Companies Act, 2013, (18 of 2013);]
(f) "holder", in relation to any operating right, means the lessee, licensee or permittee, as the case may be, in respect of such operating right;
(g) "hydrocarbon" means very large group of chemical compounds composed of carbon and hydrogen;
(h) "Indian national" means a citizen of India and includes a firm or other association, if all the members of the firm or, as the case may be, the members of the association, are citizens of India;
(i) "lessee" means the person in whose name 3[a production lease] is granted;
(j) "licensee" means the person in whose name 4[a composite licence, or an exploration licence, is grantedic;9563
(k) "mine" means any place in the offshore area wherein any exploration or production operation is carried on, together with any vessel, erection, appliance, artificial island or platform and premises in the offshore area used for the purposes of exploration, winning, treating or preparing minerals, obtaining or extracting any mineral or metal by any mode or method, and includes any area covered by 5[a composite licence, or an exploration licence, or a production lease] where exploration or production operation has been, or is being, or may be, carried on under the provisions of this Act;
(l) "mineral" includes all minerals except mineral oil and hydrocarbon resources relating thereto;
(m) "mineral oil" includes natural gas and petroleum;
(n) "offshore area" means the territorial waters, continental shelf, exclusive economic zone and other maritime zones of India under the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976);
(o) "operating right" means the right of holder of a reconnaissance permit, or 6[a composite licence, or an exploration licence, or a production lease;]
(p) "permittee" means the person in whose name the reconnaissance permit is granted;
(q) "pollution of offshore environment" means the introduction by any person, directly or indirectly, of substances or energy into the offshore environment which results, or is likely to result, in deleterious effect on living resources and marine life, hazards to human health, hindrance to marine activities, including fishing and other legitimate uses of the offshore areas and impairment of quality of sea water for use and reduction of amenities;
(r) "prescribed" means prescribed by rules made under this Act;
7[(ra) "production", with its grammatical variation and cognate expressions, means the winning of mineral within the area covered under a production lease for the purpose of processing or dispatch;]
(s) "production operation" means any operation undertaken for the purpose of winning any mineral from the offshore area and includes any operation directly or indirectly necessary there for or incidental thereto;
(t) "production lease" means a lease granted 8[under section 8 or section 12 or section 13] which confers an exclusive right for the purpose of undertaking production operation;
(u) "reconnaissance operation" means any preliminary geo-scientific survey undertaken for the purpose of searching or locating mineral deposits;
(v) "reconnaissance permit" means a permit granted 9*** for the purpose of undertaking reconnaissance operation;
7[(va) "standard block" means a block of the offshore area of one minute latitude by one minute longitude and includes the seabed and its subsoil and waters superjacent to the seabed within such block;]
(w) "vessel" includes any ship, 10[barge, boat, container, sailing vessel or stationary vessel or any other vessel of any description, submersible or otherwise and remotely operated or otherwise, used in any operation or any activity pursuant thereto].
(a) "administering authority" means an authority notified, in the Official Gazette, by the Central Government for the purposes of this Act;
(b) "atomic minerals" means the minerals included in atomic minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957) 1[and the rules made thereunder;]
(c) "Coast Guard" means the Coast Guard constituted under the Coast Guard Act, 1978 (30 of 1978);
1[(ca) "composite licence" means the exploration licence-cum-production lease, which is a two stage operating right granted for the purpose of undertaking exploration operation followed by production operation;
(cb) "dispatch" means removal of minerals or mineral products from the area covered under the production lease and includes the consumption of minerals and mineral products within such area;]
(d) "exploration licence" means a licence granted 2[for the purpose of undertaking exploration operation];
(e) "exploration operation" means any operation undertaken for the purpose of exploring, locating or proving the mineral deposits;
1[(ea) "Government company" shall have the meaning assigned to it in clause (45) of section 2 of the Companies Act, 2013, (18 of 2013);]
(f) "holder", in relation to any operating right, means the lessee, licensee or permittee, as the case may be, in respect of such operating right;
(g) "hydrocarbon" means very large group of chemical compounds composed of carbon and hydrogen;
(h) "Indian national" means a citizen of India and includes a firm or other association, if all the members of the firm or, as the case may be, the members of the association, are citizens of India;
(i) "lessee" means the person in whose name 3[a production lease] is granted;
(j) "licensee" means the person in whose name 4[a composite licence, or an exploration licence, is grantedic;9563
(k) "mine" means any place in the offshore area wherein any exploration or production operation is carried on, together with any vessel, erection, appliance, artificial island or platform and premises in the offshore area used for the purposes of exploration, winning, treating or preparing minerals, obtaining or extracting any mineral or metal by any mode or method, and includes any area covered by 5[a composite licence, or an exploration licence, or a production lease] where exploration or production operation has been, or is being, or may be, carried on under the provisions of this Act;
(l) "mineral" includes all minerals except mineral oil and hydrocarbon resources relating thereto;
(m) "mineral oil" includes natural gas and petroleum;
(n) "offshore area" means the territorial waters, continental shelf, exclusive economic zone and other maritime zones of India under the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976 (80 of 1976);
(o) "operating right" means the right of holder of a reconnaissance permit, or 6[a composite licence, or an exploration licence, or a production lease;]
(p) "permittee" means the person in whose name the reconnaissance permit is granted;
(q) "pollution of offshore environment" means the introduction by any person, directly or indirectly, of substances or energy into the offshore environment which results, or is likely to result, in deleterious effect on living resources and marine life, hazards to human health, hindrance to marine activities, including fishing and other legitimate uses of the offshore areas and impairment of quality of sea water for use and reduction of amenities;
(r) "prescribed" means prescribed by rules made under this Act;
7[(ra) "production", with its grammatical variation and cognate expressions, means the winning of mineral within the area covered under a production lease for the purpose of processing or dispatch;]
(s) "production operation" means any operation undertaken for the purpose of winning any mineral from the offshore area and includes any operation directly or indirectly necessary there for or incidental thereto;
(t) "production lease" means a lease granted 8[under section 8 or section 12 or section 13] which confers an exclusive right for the purpose of undertaking production operation;
(u) "reconnaissance operation" means any preliminary geo-scientific survey undertaken for the purpose of searching or locating mineral deposits;
(v) "reconnaissance permit" means a permit granted 9*** for the purpose of undertaking reconnaissance operation;
7[(va) "standard block" means a block of the offshore area of one minute latitude by one minute longitude and includes the seabed and its subsoil and waters superjacent to the seabed within such block;]
(w) "vessel" includes any ship, 10[barge, boat, container, sailing vessel or stationary vessel or any other vessel of any description, submersible or otherwise and remotely operated or otherwise, used in any operation or any activity pursuant thereto].
1. Ins. by Act 17 of 2023, s. 2 (w.e.f. 17-8-2023).
2. Subs. by s. 2, ibid., for "under section 12" (w.e.f. 17-8-2023).
3. Subs. by Act 17 of 2023, s. 2, for "the production lease" (w.e.f. 17-8-2023).
4. Subs. by s. 2, ibid., for "the exploration licence is granted" (w.e.f. 17-8-2023).
5. Subs. by s. 2, ibid., for "an exploration licence or production lease" (w.e.f. 17-8-2023).
6. Subs. by s. 2, ibid., for "an exploration licence, or a production lease" (w.e.f. 17-8-2023).
7. Ins. by s. 2, ibid. (w.e.f. 17-8-2023).
8. Subs. by s. 2, ibid., for "under section 13" (w.e.f. 17-8-2023).
9. The words and figures "under section 11" omitted by s. 2, ibid. (w.e.f. 17-8-2023).
10. Subs. by s. 2, ibid., for "boat, sailing vessel or any other vessel of any description" (w.e.f. 17-8-2023).
2. Subs. by s. 2, ibid., for "under section 12" (w.e.f. 17-8-2023).
3. Subs. by Act 17 of 2023, s. 2, for "the production lease" (w.e.f. 17-8-2023).
4. Subs. by s. 2, ibid., for "the exploration licence is granted" (w.e.f. 17-8-2023).
5. Subs. by s. 2, ibid., for "an exploration licence or production lease" (w.e.f. 17-8-2023).
6. Subs. by s. 2, ibid., for "an exploration licence, or a production lease" (w.e.f. 17-8-2023).
7. Ins. by s. 2, ibid. (w.e.f. 17-8-2023).
8. Subs. by s. 2, ibid., for "under section 13" (w.e.f. 17-8-2023).
9. The words and figures "under section 11" omitted by s. 2, ibid. (w.e.f. 17-8-2023).
10. Subs. by s. 2, ibid., for "boat, sailing vessel or any other vessel of any description" (w.e.f. 17-8-2023).
Section 5 Reconnaissance, exploration or production to be under permit, licence or lease.
(1) No person shall undertake any reconnaissance operation, exploration operation or production operation in the offshore areas, except under and in accordance with the prescribed terms and conditions of a reconnaissance permit, 1[a composite licence, or an exploration licence, or a production lease, granted]. under this Act and the rules made thereunder:
Provided that nothing in this sub-section shall apply to any reconnaissance operation or exploration operation undertaken by the Geological Survey of India, 2[Atomic Minerals Directorate for Exploration and Research], the Chief Hydrographer to the Government of India of 3[the National Hydrographic Office[, the National Institute of Oceanography, the National Institute of Ocean Technology of Department of Ocean Development of the Government of India, or 4[any other agency including a private entity, duly authorised in this behalf by the Central Government by notification in the Official Gazette, subject to such conditions as may be specified therein.]
5[(2) Every permittee, licensee and lessee referred to in sub-section (1), and the Government organisation, agency or private entity referred to in the proviso thereof, shall--
(a) furnish to the administering authority and such other authority as may be prescribed, all exploration and operational data, reports, samples and other information in respect of or collected pursuant to an operation, in such manner and within such period, as may be prescribed; and
(b) all exploration and operational data, reports, samples and other information in respect of or collected pursuant to an operation, shall be held by such permittee, licensee, lessee, Government organisation, agency or private entity, as the case may be, in strict confidence and any dissemination, pursuant to a sale or otherwise, of such data, reports or other information, or sharing of its samples, shall be subject to such terms and conditions, as may be prescribed.]
(3) Notwithstanding anything contained in this Act, the Central Government may--
(a) authorise seaward artillery practice under the Seaward Artillery Practice Act, 1949 (8 of 1949);
(b) provide for, by notification in the Official Gazette, special measures to ensure public safety and interest, the defence of India and civil defence, conduct of the naval operations and exercises, national security and other strategic considerations and the matters connected therewith during war like conditions or otherwise.
(4) No operating right shall be 6[granted, extended or acquired otherwise than in accordance with the provisions of this Act and the rules made thereunder and any reconnaissance permit, 7[composite licence, exploration licence or production lease, granted, extended or acquired] in contravention of the provisions of this Act or any rules made thereunder, shall be void.
Provided that nothing in this sub-section shall apply to any reconnaissance operation or exploration operation undertaken by the Geological Survey of India, 2[Atomic Minerals Directorate for Exploration and Research], the Chief Hydrographer to the Government of India of 3[the National Hydrographic Office[, the National Institute of Oceanography, the National Institute of Ocean Technology of Department of Ocean Development of the Government of India, or 4[any other agency including a private entity, duly authorised in this behalf by the Central Government by notification in the Official Gazette, subject to such conditions as may be specified therein.]
5[(2) Every permittee, licensee and lessee referred to in sub-section (1), and the Government organisation, agency or private entity referred to in the proviso thereof, shall--
(a) furnish to the administering authority and such other authority as may be prescribed, all exploration and operational data, reports, samples and other information in respect of or collected pursuant to an operation, in such manner and within such period, as may be prescribed; and
(b) all exploration and operational data, reports, samples and other information in respect of or collected pursuant to an operation, shall be held by such permittee, licensee, lessee, Government organisation, agency or private entity, as the case may be, in strict confidence and any dissemination, pursuant to a sale or otherwise, of such data, reports or other information, or sharing of its samples, shall be subject to such terms and conditions, as may be prescribed.]
(3) Notwithstanding anything contained in this Act, the Central Government may--
(a) authorise seaward artillery practice under the Seaward Artillery Practice Act, 1949 (8 of 1949);
(b) provide for, by notification in the Official Gazette, special measures to ensure public safety and interest, the defence of India and civil defence, conduct of the naval operations and exercises, national security and other strategic considerations and the matters connected therewith during war like conditions or otherwise.
(4) No operating right shall be 6[granted, extended or acquired otherwise than in accordance with the provisions of this Act and the rules made thereunder and any reconnaissance permit, 7[composite licence, exploration licence or production lease, granted, extended or acquired] in contravention of the provisions of this Act or any rules made thereunder, shall be void.
1. Subs. by Act 17 of 2023, s. 3, for "exploration licence or production lease granted" (w.e.f. 17-8-2023).
2. Subs. by s. 3, ibid., for "Atomic Minerals Directorate of Exploration and Research" (w.e.f. 17-8-2023).
3. Subs. by s. 3, ibid., for "Naval Hydrographic Office of the Indian Navy" (w.e.f. 17-8-2023).
4. Subs. by s. 3, ibid., for "any other agency duly authorised in this behalf by the Central Government" (w.e.f. 17-8-2023).
5. Subs. by s. 3, ibid., for sub-section (2) (w.e.f. 17-8-2023).
6. Subs. by s. 3, ibid., for "granted or renewed" (w.e.f. 17-8-2023).
7. Subs. by s. 3, ibid., for "exploration licence or production lease granted, renewed or acquired" (w.e.f. 17-8-2023).
2. Subs. by s. 3, ibid., for "Atomic Minerals Directorate of Exploration and Research" (w.e.f. 17-8-2023).
3. Subs. by s. 3, ibid., for "Naval Hydrographic Office of the Indian Navy" (w.e.f. 17-8-2023).
4. Subs. by s. 3, ibid., for "any other agency duly authorised in this behalf by the Central Government" (w.e.f. 17-8-2023).
5. Subs. by s. 3, ibid., for sub-section (2) (w.e.f. 17-8-2023).
6. Subs. by s. 3, ibid., for "granted or renewed" (w.e.f. 17-8-2023).
7. Subs. by s. 3, ibid., for "exploration licence or production lease granted, renewed or acquired" (w.e.f. 17-8-2023).
Section 6 Grant of operating right.
The Central Government shall not grant an operating right to any person unless such person--
(a) is an Indian national, or a company as defined in 1[clause (20) of section 2 of the Companies Act, 2013 (18 of 2013)]; and
(b) satisfies such conditions as may be prescribed:
2[Provided that no exploration licence, or composite licence, or production lease shall be granted for an area to any person other than the Government, a Government company or a corporation, in respect of any minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957), subject to such conditions and manner as may be prescribed, where the grade of such mineral in such area is equal to or greater than such threshold value as the Central Government may, by notification in the Official Gazette, specify:
Provided further that no production lease shall be granted in respect of any part of the offshore area, unless the existence of mineral resources in such offshore area has been adequately established in accordance with such parameters as may be prescribed.]
(a) is an Indian national, or a company as defined in 1[clause (20) of section 2 of the Companies Act, 2013 (18 of 2013)]; and
(b) satisfies such conditions as may be prescribed:
2[Provided that no exploration licence, or composite licence, or production lease shall be granted for an area to any person other than the Government, a Government company or a corporation, in respect of any minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957), subject to such conditions and manner as may be prescribed, where the grade of such mineral in such area is equal to or greater than such threshold value as the Central Government may, by notification in the Official Gazette, specify:
Provided further that no production lease shall be granted in respect of any part of the offshore area, unless the existence of mineral resources in such offshore area has been adequately established in accordance with such parameters as may be prescribed.]
1. Subs. by Act 17 of 2023, s. 4, for "section 3 of the Companies Act, 1956 (1 of 1956)" (w.e.f. 17-8-2023).
2. Subs. by s. 4, ibid., for the proviso (w.e.f. 17-8-2023).
2. Subs. by s. 4, ibid., for the proviso (w.e.f. 17-8-2023).
Section 7 Termination of operating right.
(1) Where the Central Government, after consultation with the administering authority, is of the opinion 1[that it is expedient in public interest, strategic interest of the country, in the interest of] development and regulation of offshore mineral resources, preservation of natural environment and prevention of pollution, avoidance of danger to public health or communication, ensuring safety of any offshore structure or conservation of mineral resources 2[or for any other reason], the Central Government may prematurely terminate any operating right in respect of any mineral in any offshore area or part thereof.
(2) No order for premature termination of operating right under sub-section (1) shall be made except after giving the holder of operating right a reasonable 3[opportunity of being heard, except in cases where premature termination is being done on the grounds of strategic interest of the country].
(3) Where the holder of any operating right fails to commence operation within the period specified in section 14 or discontinues the operation for a period of two years, the operating right shall lapse from the date of execution of the lease or, as the case may be, discontinuance of the operation:
Provided that the administering authority, on an application made by the holder of operating right and after being satisfied that such non-commencement of operation or discontinuation thereof, is due to the reasons beyond the control of the holder of operating right, may 4[extend the period specified in section 14 by a further period not exceeding one year and such extension shall not be granted for more than once during the entire period of operating right:]
5[Provided further that where the holder of operating right--
(a) fails to undertake operation; or
(b) having commenced the operation, discontinues such operation,
before the end of the extended period, such operating right shall also lapse from the date of execution of the lease or, as the case may be, discontinuance of the operation.]
5[(4) Where the holder of a production lease fails to undertake production and dispatch for a period of four years after the date of execution of the lease, or having commenced production and dispatch, discontinues the same for a period of two years, then such lease shall lapse on the expiry of the period of four years from the date of its execution or, as the case may be, two years from date of discontinuance of the production and dispatch:
Provided that the administering authority may, on an application made by the lessee, and after being satisfied that such non-commencement of production, or dispatch, or discontinuation thereof, was due to the reasons beyond the control of the lessee, may extend such period by a further period not exceeding one year, but such extension shall not be granted for more than once during the entire period of lease:
Provided further that where the lessee,--
(a) fails to undertake production or dispatch; or
(b) having commenced the production and dispatch, discontinues the same,
before the end of the extended period, such lease shall lapse from the date of its execution or, as the case may be, discontinuance of production or dispatch.]
(2) No order for premature termination of operating right under sub-section (1) shall be made except after giving the holder of operating right a reasonable 3[opportunity of being heard, except in cases where premature termination is being done on the grounds of strategic interest of the country].
(3) Where the holder of any operating right fails to commence operation within the period specified in section 14 or discontinues the operation for a period of two years, the operating right shall lapse from the date of execution of the lease or, as the case may be, discontinuance of the operation:
Provided that the administering authority, on an application made by the holder of operating right and after being satisfied that such non-commencement of operation or discontinuation thereof, is due to the reasons beyond the control of the holder of operating right, may 4[extend the period specified in section 14 by a further period not exceeding one year and such extension shall not be granted for more than once during the entire period of operating right:]
5[Provided further that where the holder of operating right--
(a) fails to undertake operation; or
(b) having commenced the operation, discontinues such operation,
before the end of the extended period, such operating right shall also lapse from the date of execution of the lease or, as the case may be, discontinuance of the operation.]
5[(4) Where the holder of a production lease fails to undertake production and dispatch for a period of four years after the date of execution of the lease, or having commenced production and dispatch, discontinues the same for a period of two years, then such lease shall lapse on the expiry of the period of four years from the date of its execution or, as the case may be, two years from date of discontinuance of the production and dispatch:
Provided that the administering authority may, on an application made by the lessee, and after being satisfied that such non-commencement of production, or dispatch, or discontinuation thereof, was due to the reasons beyond the control of the lessee, may extend such period by a further period not exceeding one year, but such extension shall not be granted for more than once during the entire period of lease:
Provided further that where the lessee,--
(a) fails to undertake production or dispatch; or
(b) having commenced the production and dispatch, discontinues the same,
before the end of the extended period, such lease shall lapse from the date of its execution or, as the case may be, discontinuance of production or dispatch.]
1. Subs. by Act 17 of 2023, s. 5, for "that it is expedient in the interest of" (w.e.f. 17-8-2023).
2. Ins. by s. 5, ibid. (w.e.f. 17-8-2023).
3. Subs. by s. 5, ibid., for "opportunity of being heard" (w.e.f. 17-8-2023).
4. Subs. by s. 5, ibid., for "condone such non-commencement or discontinuation." (w.e.f. 17-8-2023).
5. Ins. by s. 5, ibid., (w.e.f. 17-8-2023).
2. Ins. by s. 5, ibid. (w.e.f. 17-8-2023).
3. Subs. by s. 5, ibid., for "opportunity of being heard" (w.e.f. 17-8-2023).
4. Subs. by s. 5, ibid., for "condone such non-commencement or discontinuation." (w.e.f. 17-8-2023).
5. Ins. by s. 5, ibid., (w.e.f. 17-8-2023).
Section 8 Reservation of areas.
(1) The Central Government may, from time to time, by notification in the Official Gazette, reserve any offshore area not already held under any operating right, for the purposes of the Central Government and, where it proposes to do so, it shall, by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such area shall be reserved.
(2) The Central Government may, from time to time, by notification in the Official Gazette, dereserve, any area reserved under sub-section (1), in the interest of development and regulation of the offshore mineral.
1](3) Where the Central Government reserves any offshore area under sub-section (1), the administering authority may, subject to such terms and conditions as may be prescribed, grant a composite licence, or a production lease, in such area or any part thereof to the Government, or a Government company, or a corporation.
(4) A composite licence or a production lease granted to the Government, or a Government company, or a corporation under sub-section (3) shall be subject to the same terms and conditions applicable to a licensee or a lessee, as the case may be, except the procedure specified for grant of a composite licence under section 12 or a production lease under section 13.
(5) Where a Government company, or corporation is desirous of carrying out the exploration operation or production operation in a joint venture with other persons, the joint venture partner shall be selected through a competitive process, and such Government company or corporation shall hold more than seventy-four per cent. of the paid up share capital in such joint venture.]
(2) The Central Government may, from time to time, by notification in the Official Gazette, dereserve, any area reserved under sub-section (1), in the interest of development and regulation of the offshore mineral.
1](3) Where the Central Government reserves any offshore area under sub-section (1), the administering authority may, subject to such terms and conditions as may be prescribed, grant a composite licence, or a production lease, in such area or any part thereof to the Government, or a Government company, or a corporation.
(4) A composite licence or a production lease granted to the Government, or a Government company, or a corporation under sub-section (3) shall be subject to the same terms and conditions applicable to a licensee or a lessee, as the case may be, except the procedure specified for grant of a composite licence under section 12 or a production lease under section 13.
(5) Where a Government company, or corporation is desirous of carrying out the exploration operation or production operation in a joint venture with other persons, the joint venture partner shall be selected through a competitive process, and such Government company or corporation shall hold more than seventy-four per cent. of the paid up share capital in such joint venture.]
1. Ins. by Act 17 of 2023, s. 6 (w.e.f. 17-8-2023).
Section 9 Power of close areas.
(1) The Central Government may, in the public interest, by order in writing and communicated to the permittee, licensee or lessee, as the case may be, close any area either in part or whole, covered under any operating right, for 1[such period as may be specified in the order, for] the preservation of natural environment and prevention of pollution, or to avoid danger to public health, or communication, or to ensure safety of any offshore structure or platform, or for the conservation of 2[offshore mineral, or for regulation of offshore areas, or for national security] or for any other strategic consideration.
(2) Any area, either in part or whole closed under sub-section (1) and included in any operating right, shall, from the date of such order, be deemed to be excluded for the purposes of the operating right 1[for such period as may be specified in the order and the holder of the operating right shall not undertake any operation in the area covered under such order 3[during the period of closure specified therein].
(2) Any area, either in part or whole closed under sub-section (1) and included in any operating right, shall, from the date of such order, be deemed to be excluded for the purposes of the operating right 1[for such period as may be specified in the order and the holder of the operating right shall not undertake any operation in the area covered under such order 3[during the period of closure specified therein].
1. Ins. by Act 17 of 2023, s. 7, (w.e.f. 17-8-2023).
2. Subs. by s. 7, ibid., for "offshore mineral, or for national security" (w.e.f. 17-8-2023).
3. Subs. by s. 7, ibid., for "from the date specified therein" (w.e.f. 17-8-2023).
2. Subs. by s. 7, ibid., for "offshore mineral, or for national security" (w.e.f. 17-8-2023).
3. Subs. by s. 7, ibid., for "from the date specified therein" (w.e.f. 17-8-2023).
Section 10 Availability of areas for grant of permit, licence or lease.
1[Within six months] from the date of commencement of this Act, and subsequently at such times as may be considered necessary in this behalf by the administering authority, it shall, by notification in the Official Gazette, declare the parts of the offshore areas which shall be available for grant of 2[reconnaissance permit, or exploration licence, or composite licence, or production lease].
3[* * * * *]
3[* * * * *]
1. Subs. by Act 17 of 2023, s. 8, for "(1) Within six months" (w.e.f. 17-8-2023).
2. Subs. by s. 8, ibid., for "reconnaissance permit, exploration licence or production lease" (w.e.f. 17-8-2023).
3. Sub-section (2) and (3) omitted by s. 8, ibid. (w.e.f. 17-8-2023).
2. Subs. by s. 8, ibid., for "reconnaissance permit, exploration licence or production lease" (w.e.f. 17-8-2023).
3. Sub-section (2) and (3) omitted by s. 8, ibid. (w.e.f. 17-8-2023).
Section 11 Omitted.
[Grant of reconnaissance permit.]— Omitted by the Offshore Areas Mineral (Development and Regulation) Amendment Act, 2023 (17 of 2023), s. 9 (w.e.f. 17-8-2023).
Section 12 Grant of composite licence.
1[12. Grant of composite licence.--(1) The administering authority may, in respect of an offshore area where the existence of mineral resources has not been adequately established for grant of a production lease as required by the second proviso to section 6, after inviting applications in this behalf, select any person for grant of a composite licence, who--
(a) fulfils the eligibility conditions as specified in this Act and such conditions as may be prescribed; and
(b) is selected through auction by method of competitive bidding, including e-auction, conducted on the basis of such terms and conditions, manner and bidding parameters, as may be prescribed.
(2) The Central Government shall grant the composite licence to the person selected in accordance with the procedure laid down in sub-section (1).
(3) The licensee shall complete the exploration operations satisfactorily, as specified in the notice inviting applications, within a period of three years from the date of grant of the composite licence: Provided that the administering authority may, on an application made by the licensee three months before the lapse of the said period, for reasons to be recorded in writing and subject to such conditions as may be prescribed, grant an extension for a period of two years to the licensee for satisfactory completion of the exploration operations:
Provided further that no further extension shall be granted upon expiry of the extended period, if any, granted under the first proviso.
(4) The area granted under a composite licence shall comprise of contiguous standard blocks, which in aggregate do not exceed an area of thirty minutes latitude by thirty minutes longitude.
(5) Every licensee shall, on being granted a composite licence, commence and carry out exploration operation subject to such terms, milestones and relinquishment requirements, as may be prescribed.
(6) A licensee, who has adequately established the existence of mineral resources in an offshore area held under the composite licence, or part thereof, as required by the second proviso to section 6, shall, within the period specified or extended under sub-section (3), subject to such terms and conditions, and on making an application to the administering authority in such form, as may be prescribed, be granted one or more production leases:
Provided that such licensee--
(a) is not in breach of the terms and conditions of his composite licence;
(b) continues to be eligible for grant of a production lease in accordance with section 6; and
(c) has applied for grant of production lease within six months of completion of his exploration operations:
Provided further that the total area of such production lease or production leases, granted in pursuance of a single composite licence, shall not exceed fifteen minutes latitude by fifteen minutes longitude.
(7) The administering authority shall, on receipt of an application under sub-section (6), and on being satisfied that the licensee meets the requirements under the provisions of this Act and the rules made thereunder, recommend to the Central Government for grant of production lease to such licensee.
(8) The Central Government shall, on receipt of a recommendation under sub-section (7) from the administering authority, grant production lease to the licensee in accordance with such procedure as may be prescribed.
(9) Every production lease granted in pursuance of a composite licence shall be for a period of fifty years.
(10) All rights and interests held under a composite licence in the parts of an offshore area, in respect of which no production lease is granted, shall cease to exist upon expiry of the composite licence.
(11) The provisions of this section shall not apply to--
(a) the areas covered under section 8; and
(b) the minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957, (67 of 1957) where the grade of atomic mineral is equal to or greater than such threshold value, as the Central Government may, by notification in the Official Gazette, specify]
(a) fulfils the eligibility conditions as specified in this Act and such conditions as may be prescribed; and
(b) is selected through auction by method of competitive bidding, including e-auction, conducted on the basis of such terms and conditions, manner and bidding parameters, as may be prescribed.
(2) The Central Government shall grant the composite licence to the person selected in accordance with the procedure laid down in sub-section (1).
(3) The licensee shall complete the exploration operations satisfactorily, as specified in the notice inviting applications, within a period of three years from the date of grant of the composite licence: Provided that the administering authority may, on an application made by the licensee three months before the lapse of the said period, for reasons to be recorded in writing and subject to such conditions as may be prescribed, grant an extension for a period of two years to the licensee for satisfactory completion of the exploration operations:
Provided further that no further extension shall be granted upon expiry of the extended period, if any, granted under the first proviso.
(4) The area granted under a composite licence shall comprise of contiguous standard blocks, which in aggregate do not exceed an area of thirty minutes latitude by thirty minutes longitude.
(5) Every licensee shall, on being granted a composite licence, commence and carry out exploration operation subject to such terms, milestones and relinquishment requirements, as may be prescribed.
(6) A licensee, who has adequately established the existence of mineral resources in an offshore area held under the composite licence, or part thereof, as required by the second proviso to section 6, shall, within the period specified or extended under sub-section (3), subject to such terms and conditions, and on making an application to the administering authority in such form, as may be prescribed, be granted one or more production leases:
Provided that such licensee--
(a) is not in breach of the terms and conditions of his composite licence;
(b) continues to be eligible for grant of a production lease in accordance with section 6; and
(c) has applied for grant of production lease within six months of completion of his exploration operations:
Provided further that the total area of such production lease or production leases, granted in pursuance of a single composite licence, shall not exceed fifteen minutes latitude by fifteen minutes longitude.
(7) The administering authority shall, on receipt of an application under sub-section (6), and on being satisfied that the licensee meets the requirements under the provisions of this Act and the rules made thereunder, recommend to the Central Government for grant of production lease to such licensee.
(8) The Central Government shall, on receipt of a recommendation under sub-section (7) from the administering authority, grant production lease to the licensee in accordance with such procedure as may be prescribed.
(9) Every production lease granted in pursuance of a composite licence shall be for a period of fifty years.
(10) All rights and interests held under a composite licence in the parts of an offshore area, in respect of which no production lease is granted, shall cease to exist upon expiry of the composite licence.
(11) The provisions of this section shall not apply to--
(a) the areas covered under section 8; and
(b) the minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957, (67 of 1957) where the grade of atomic mineral is equal to or greater than such threshold value, as the Central Government may, by notification in the Official Gazette, specify]
1. Subs. by Act 17 of 2023, s. 10, for section 12 and 13 (w.e.f. 17-8-2023).
Section 13 Grant of production lease.
1[13. Grant of production lease.-- (1) The administering authority may, in respect of an offshore area where the existence of mineral resources has been adequately established for grant of production lease as required by the second proviso to section 6, after inviting applications in this behalf, select any person for grant of a production lease, who--
(a) fulfils the eligibility conditions as specified in this Act and such conditions as may be prescribed; and
(b) is selected through auction by method of competitive bidding, including e-auction, conducted on the basis of such terms and conditions, manner and bidding parameters, as may be prescribed.
(2) The Central Government shall grant the production lease to the applicant selected in accordance with the procedure laid down under sub-section (1).
(3) Every production lease under this section shall be granted for a period of fifty years.
(4) The area under a production lease shall comprise of contiguous standard blocks and shall not exceed an area of fifteen minutes latitude by fifteen minutes longitude.
(5) Upon grant of a production lease, the lessee shall commence and carry out production operation in such manner and subject to such terms and conditions, as may be prescribed.
(6) The provisions of this section shall not apply to--
(a) the areas covered under section 8; and
(b) the minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957), where the grade of atomic mineral is equal to or greater than such threshold value, as the Central Government may, by notification in the Official Gazette, specify.]
(a) fulfils the eligibility conditions as specified in this Act and such conditions as may be prescribed; and
(b) is selected through auction by method of competitive bidding, including e-auction, conducted on the basis of such terms and conditions, manner and bidding parameters, as may be prescribed.
(2) The Central Government shall grant the production lease to the applicant selected in accordance with the procedure laid down under sub-section (1).
(3) Every production lease under this section shall be granted for a period of fifty years.
(4) The area under a production lease shall comprise of contiguous standard blocks and shall not exceed an area of fifteen minutes latitude by fifteen minutes longitude.
(5) Upon grant of a production lease, the lessee shall commence and carry out production operation in such manner and subject to such terms and conditions, as may be prescribed.
(6) The provisions of this section shall not apply to--
(a) the areas covered under section 8; and
(b) the minerals specified in Part B of the First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957), where the grade of atomic mineral is equal to or greater than such threshold value, as the Central Government may, by notification in the Official Gazette, specify.]
1. Subs. by Act 17 of 2023, s. 10, for section 12 and 13 (w.e.f. 17-8-2023).
Section 13A Maximum area for which operating rights may be granted
1[13A. Maximum area for which operating rights may be granted.--(1) Notwithstanding anything contained in section 12 or section 13, no person shall acquire in respect of any mineral or a group of associated minerals, as may be prescribed, one or more exploration licence, composite licence and production lease, all taken together and covering a total area of more than forty-five minutes latitude by forty-five minutes longitude:
Provided that if the Central Government is of the opinion that in the interest of the development of any mineral or industry, it is necessary so to do, it may, for the reasons to be recorded in writing, increase or decrease the said area limit in respect of any mineral or any specified category of deposits of such mineral or such group of associated minerals.
(2) For the purposes of this section, a person acquiring by, or in the name of, another person an operating right which is intended for himself, shall be deemed to be acquiring it himself.
(3) For the purposes of determining the total area referred to in sub-section (1), the area held under an operating right by a person as a member of a co-operative society, or a company, or a corporation, or a Hindu undivided family, or a partner of a firm, shall be deducted from the area referred to in sub-section (1) so that the sum total of the area held by such person, under an operating right, whether as such member or partner, or individually, may not, in any case, exceed the total area specified in sub-section (1).]
Provided that if the Central Government is of the opinion that in the interest of the development of any mineral or industry, it is necessary so to do, it may, for the reasons to be recorded in writing, increase or decrease the said area limit in respect of any mineral or any specified category of deposits of such mineral or such group of associated minerals.
(2) For the purposes of this section, a person acquiring by, or in the name of, another person an operating right which is intended for himself, shall be deemed to be acquiring it himself.
(3) For the purposes of determining the total area referred to in sub-section (1), the area held under an operating right by a person as a member of a co-operative society, or a company, or a corporation, or a Hindu undivided family, or a partner of a firm, shall be deducted from the area referred to in sub-section (1) so that the sum total of the area held by such person, under an operating right, whether as such member or partner, or individually, may not, in any case, exceed the total area specified in sub-section (1).]
1. Ins. by Act 17 of 2023, s. 11 (w.e.f. 17-8-2023).
Section 13B Transfer of composite licence or production lease.
1[13B. Transfer of composite licence or production lease.-- (1) A composite licence or a production lease granted under section 8, or through competitive bidding under section 12 or section 13, may be transferred by the relevant licensee or lessee, as the case may be, in such manner and subject to such conditions, as may be prescribed, to any person eligible for grant of such licence or lease, under the provisions of this Act:
Provided that no such transfer of a composite licence or a production lease shall be made in contravention of any conditions, subject to which such licence or lease was granted.
Explanation.--For the purposes of this sub-section, it is clarified that transfer may include one or more production leases, granted pursuant to one composite licence.
(2) The provisions of this Act, the rules made thereunder and the terms and conditions of a composite licence or a production lease, shall be binding upon the person to whom such licence or lease, as the case may be, is transferred under sub-section (1).
Provided that no such transfer of a composite licence or a production lease shall be made in contravention of any conditions, subject to which such licence or lease was granted.
Explanation.--For the purposes of this sub-section, it is clarified that transfer may include one or more production leases, granted pursuant to one composite licence.
(2) The provisions of this Act, the rules made thereunder and the terms and conditions of a composite licence or a production lease, shall be binding upon the person to whom such licence or lease, as the case may be, is transferred under sub-section (1).
1. Ins. by Act 17 of 2023, s. 11 (w.e.f. 17-8-2023)
Section 13C Certain applications and exploration licence to become ineligible.
1[13C. Certain applications and exploration licence to become ineligible.--(1) On and from the date of commencement of the Offshore Areas Mineral (Development and Regulation) Amendment Act, 2023, auction being the sole method of selection for grant of composite licence or production lease under sections 12 and 13,--
(a) all applications received prior to the said date of commencement for grant of composite licence or production lease shall become ineligible;
(b) any exploration licence granted prior to the said date of commencement shall become ineligible for grant of production lease over the offshore area covered by such exploration licence.
(2) The provisions of sub-section (1) shall be applicable notwithstanding anything contained in this Act, or any order or direction to the contrary, passed by any court or authority, prior to the commencement of the Offshore Areas Mineral (Development and Regulation) Amendment Act, 2023.]
(a) all applications received prior to the said date of commencement for grant of composite licence or production lease shall become ineligible;
(b) any exploration licence granted prior to the said date of commencement shall become ineligible for grant of production lease over the offshore area covered by such exploration licence.
(2) The provisions of sub-section (1) shall be applicable notwithstanding anything contained in this Act, or any order or direction to the contrary, passed by any court or authority, prior to the commencement of the Offshore Areas Mineral (Development and Regulation) Amendment Act, 2023.]
1. Ins. by Act 17 of 2023, s. 11 (w.e.f. 17-8-2023).
Section 14 Period of commencement of operating rights.
A holder of operating right shall commence operation within the period specified below after the grant of the operating right and shall thereafter conduct such operation in proper, skilful and workman-like manner, as follows:--
table
/table
table
| (a) reconnaissance permit | six months; |
| 1[(aa) composite licence | one year;] |
| (b) exploration licence | one year; and |
| (c) production lease | two years. |
1. Ins. by Act 17 of 2023, s. 12, (w.e.f. 17-8-2023).
Section 15 Power of Central Government to authorise survey, research and scientific investigations in areas covered under operating rights.
Any person or agency authorised by notification in the Official Gazette, by the Central Government in this behalf, may conduct survey, research, diving operations and scientific investigations in the offshore areas, including any area covered under operating rights and the permittee, licensee or lessee, as the case may be, shall permit such person or agency to undertake the said investigations in their respective areas and to render such assistance as may be necessary for conduct of the investigations.
Section 16 Royalty.
(1) A lessee shall pay royalty to the Central Government in respect of any mineral removed or 1[consumed from the area covered under his production] lease, at the rate for the time being specified in the First Schedule in respect of that mineral.
(2) The Central Government may, by notification in the Official Gazette, amend the First Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification:
Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years.
(2) The Central Government may, by notification in the Official Gazette, amend the First Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification:
Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years.
1. Subs. by Act 17 of 2023, s. 13, for "consumed by him from the area covered under the production" (w.e.f. 17-8-2023).
Section 16A Establishment of Offshore Areas Mineral Trust.
1[16A. Establishment of Offshore Areas Mineral Trust.--(1) The Central Government shall, by notification in the Official Gazette, establish a Trust, as a non-profit autonomous body, to be called the Offshore Areas Mineral Trust.
(2) The object of the Offshore Areas Mineral Trust shall be to use the funds accrued to it for the following purposes, namely:--
(a) research, administration, studies and related expenditure with respect to offshore areas and mitigation of any adverse impact that may be caused to the ecology in the offshore area, due to operations undertaken; or
(b) providing relief upon the occurrence of any disaster in the offshore area; or
(c) the purposes of exploration in the offshore area; or
(d) for the interest and benefit of persons affected by exploration or production operations undertaken; or
(e) such other purposes, as may be prescribed.
(3) The composition and functions of the Offshore Areas Mineral Trust shall be such as may be prescribed.
(4) The funds accrued to the Offshore Areas Mineral Trust shall be non-lapsable under the public account of India and be administered in such manner as may be prescribed.
(5) A lessee shall pay, in addition to the royalty, to the Offshore Areas Mineral Trust, an amount which is equivalent to such percentage of the royalty paid in terms of the First Schedule, not exceeding one-third of such royalty, in such manner as may be prescribed.
(6) The entities specified and notified under sub-section (1) of section 5 shall be eligible for funding under the Offshore Areas Mineral Trust, subject to such conditions as may be specified by the Central Government.]
(2) The object of the Offshore Areas Mineral Trust shall be to use the funds accrued to it for the following purposes, namely:--
(a) research, administration, studies and related expenditure with respect to offshore areas and mitigation of any adverse impact that may be caused to the ecology in the offshore area, due to operations undertaken; or
(b) providing relief upon the occurrence of any disaster in the offshore area; or
(c) the purposes of exploration in the offshore area; or
(d) for the interest and benefit of persons affected by exploration or production operations undertaken; or
(e) such other purposes, as may be prescribed.
(3) The composition and functions of the Offshore Areas Mineral Trust shall be such as may be prescribed.
(4) The funds accrued to the Offshore Areas Mineral Trust shall be non-lapsable under the public account of India and be administered in such manner as may be prescribed.
(5) A lessee shall pay, in addition to the royalty, to the Offshore Areas Mineral Trust, an amount which is equivalent to such percentage of the royalty paid in terms of the First Schedule, not exceeding one-third of such royalty, in such manner as may be prescribed.
(6) The entities specified and notified under sub-section (1) of section 5 shall be eligible for funding under the Offshore Areas Mineral Trust, subject to such conditions as may be specified by the Central Government.]
1. Ins. by Act 17 of 2023, s. 14, (w.e.f. 17-8-2023).