On 16-10-2024, the Ministry of Mines notified the Offshore Areas Operating Right Rules, 2024 which provides a structured framework for granting operating rights for mineral exploration and production in offshore areas. The provisions came into effect on 16-10-2024.
Key Points:
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These Regulations are governed under the Offshore Areas Mineral (Development and Regulation) Act, 2002.
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Applicable to all minerals in the offshore areas, except:
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Mineral oils and hydrocarbons;
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Atomic minerals having a grade equal to greater than the threshold value in respect of atomic minerals.
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Any offshore area can be made available for grant of any operating right only when the availability of the area for grant is notified by the administrating authority.
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Grant of operating rights to Government, Government companies or corporations-
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Central Government will have to consult Ministries/ Department s before grant of any operating rights.
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All production leases granted will be for a period of 50 years.
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All composite leases granted will be for a period of 30 years.
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The period for lease can be extended only for 2 years if the licensee makes an application before the administering authority within the period of 3 months before the lapse of granted period of 50/ 30 years and the administering authority is satisfied that the extension should be given for satisfactory completion of the exploration operations.
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Expiry, Lapse, Surrender or Termination:
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Expiry: On expiration of production lease period, the lease can be put up for auction and this process can be commenced 1 year in advance of expiry.
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Lapsing of composite licence: when the licensee fails to commence exploration operation within 1 year after the grant of composition licence or discontinues operation for a period of 2 years after commencement of operation, the administering authority can declare the licence as lapsed.
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Lapsing of production lease: when the lessee fails to commence production operations within 2 years after the grant of production lease or discontinues the production operations for a period of 2 years after commencement of operation, the administering authority can declare the production lease as lapsed.
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Surrender of production lease: An application must be made by the lessee, mentioning the part of lease intended to be surrendered, to the administering authority after giving a notice in writing before 6 months from the intended date of surrender.
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Termination: Central Government after consulting the administering authority can terminate a production lease or composite licence if they think that the termination is:
✓ expedient in public interest/ strategic interest;
✓ in the interest of development and regulation of offshore mineral resources;
✓ Preservation of natural environment;
✓ Prevention of pollution;
✓ Avoidance of danger to public health/ communication;
✓ Ensuring safety of any offshore structures;
✓ Conservation of mineral resources.
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Transfer of production lease/ composite lease can be done by the holder with the prior approval of the administering authority.
The transferor and transferee will jointly have to submit an application to the administering authority in Form IV containing the details of the consideration payable by the transferee for the transfer, reports and data generated during the operations.
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Anyone contravening the provisions of these rules will be punishable with imprisonment to the term extending upto 5 years or with a fine of Rs. 50 lakh which can extend upto rs. 1 crore or with both.
