By Bhaskar Bhardwaj, Managing Partner, Cosmos Legal
PIONEER EDGE NEWS SERVICE
India’s aspiration to become a developed economy by 2047 rests on a simple but critical foundation: energy security. As the economy expands, manufacturing grows and infrastructure development accelerates, the country’s appetite for energy will continue to increase. While renewable energy will play an increasingly important role in the energy mix, oil and gas will remain indispensable for transport, petrochemicals, heavy industries and several hard-to-abate sectors for decades.
Yet India continues to import nearly 90 per cent of its crude oil requirement, exposing the economy to geopolitical disruptions, supply shocks and volatile global prices. Strengthening domestic exploration and production is therefore vital. India is well positioned to strengthen domestic production. With 26 sedimentary basins covering nearly 3.36 million square kilometres and only around 10 per cent explored using modern technologies, the country possesses one of the world’s largest underexplored hydrocarbon provinces.
Reforms such as the Hydrocarbon Exploration and Licensing Policy (HELP), the Open Acreage Licensing Programme (OALP), streamlined approvals and improved access to geological data have created a stronger foundation for exploration. However, attracting investment is only the first step. The larger challenge is ensuring that discoveries translate into sustained production. That requires more than favourable geology or progressive policies; it requires long-term regulatory confidence.
The experiences of private operators over the past decade demonstrate why this challenge has become increasingly urgent. Upstream projects require billions of dollars in capital, advanced technologies and investment horizons extending over decades. Companies commit resources long before commercial production begins, making regulatory certainty as important as geological potential. When uncertainty persists around licence renewals, contractual interpretation, field extensions or regulatory approvals, the consequences extend beyond individual projects. They influence future investment decisions, delay technology deployment and affect the willingness of private operators to commit fresh capital to India’s upstream sector.
Recent industry experience reinforces this reality. The Cambay block has become a notable example of how prolonged uncertainty around licence renewals can raise questions over tenure continuity for mature producing assets. The decade-long KG-D6 arbitration, the prolonged revival of the PY-3 field and delays affecting discoveries such as Ashok Nagar similarly demonstrate how regulatory and contractual uncertainty can postpone production despite commercially recoverable resources. While each case has its own legal and operational context, together they send a broader message to investors—that regulatory outcomes can remain uncertain long after capital has been committed.
The implications extend well beyond the upstream industry. Every delayed project represents deferred domestic production, continued dependence on imported crude, postponed government revenues and slower deployment of advanced technologies. At a time when India is seeking to enhance energy security, prolonged uncertainty over commercially viable assets carries an economic cost that extends far beyond individual operators. It also shapes where future capital is deployed. In an industry where investment decisions span decades, regulatory uncertainty today influences investment pipelines for years to come.
This challenge is becoming more pronounced as global upstream capital grows increasingly selective. Countries such as Guyana, Brazil, Namibia and Suriname have rapidly attracted investment by pairing attractive geology with stable fiscal regimes, predictable regulation and timely decision-making. Their experience demonstrates that investors increasingly reward regulatory certainty as much as resource potential. India possesses the geological promise to compete globally, but unless regulatory predictability keeps pace with policy ambition, it risks losing a larger share of globally mobile capital, and the production, technology and expertise it brings, to competing jurisdictions.
This is not an argument for lighter regulation. Governments must continue to safeguard sovereign resources and enforce compliance. But robust regulation is most effective when it is accompanied by transparency, consistency and timely implementation. The Petroleum and Natural Gas Rules, 2025 are an important step towards strengthening confidence by enabling lease extensions aligned with the economic life of producing fields. Their success, however, will ultimately depend on fair, predictable and consistent implementation across the lifecycle of upstream assets.
India has already made commendable progress in improving the ease of doing business. The next phase of reform must focus on building the confidence to stay invested. Regulatory predictability is no longer simply a governance issue, it has become a strategic requirement for accelerating domestic production, reducing import dependence and strengthening national energy security. In a world where upstream capital is increasingly mobile, countries that combine resource potential with policy certainty will define the next chapter of global energy investment. For India, building that confidence may prove to be the most important upstream reform of all.
