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.
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 8
[clause (20) of section 2 of the Companies
Act, 2013 (18 of 2013)]; and
(b) satisfies such conditions as may be prescribed:
9
[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
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).
8. Subs. by s. 4, ibid., for “section 3 of the Companies Act, 1956 (1 of 1956)” (w.e.f. 17-8-2023).
9. Subs. by s. 4, ibid., for the proviso (w.e.f. 17-8-2023).
6
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.]
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.]
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
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).
7
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.]
9. Power to 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
2
[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
3
[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 2
[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 4
[during the period of closure specified therein].
10. Availability of areas for grant of permit, licence or lease.—5
[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 6
[reconnaissance permit, or exploration licence, or
composite licence, or production lease].
7
[* * * * *]
11. [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).
8
[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.
1. Ins. by Act 17 of 2023, s. 6 (w.e.f. 17-8-2023).
2. Ins. by s. 7, ibid. (w.e.f. 17-8-2023).
3. Subs. by s. 7, ibid., for “offshore mineral, or for national security” (w.e.f. 17-8-2023).
4. Subs. by s. 7, ibid., for “from the date specified therein” (w.e.f. 17-8-2023).
5. Subs. by s. 8, ibid., for “(1) Within six months” (w.e.f. 17-8-2023).
6. Subs. by s. 8, ibid., for “reconnaissance permit, exploration licence or production lease” (w.e.f. 17-8-2023).
7. Sub-section (2) and (3) omitted by s. 8, ibid. (w.e.f. 17-8-2023).
8. Subs. by s. 10, ibid., for section 12 and 13 (w.e.f. 17-8-2023).
8
(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.
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—
9
(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
[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).
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).
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,
1. Ins. by Act 17 of 2023, s. 11 (w.e.f. 17-8-2023).
10
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.]
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:—
(a) reconnaissance permit — six months;
1
[(aa) composite licence — one year;]
(b) exploration licence — one year; and
(c) production lease — two years.
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.
16. Royalty.—(1) A lessee shall pay royalty to the Central Government in respect of any mineral
removed or 2
[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.
3
[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.
1. Ins. by Act 17 of 2023, s. 12, (w.e.f. 17-8-2023).
2. Subs. by s. 13, ibid., for “consumed by him from the area covered under the production” (w.e.f. 17-8-2023).
3. Ins. by s. 14, ibid., (w.e.f. 17-8-2023).
11
(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.]
17. Fixed rent.—(1) A lessee shall pay to the Central Government, every year, fixed rent in respect
of the area covered under the production lease, at the rate for the time being specified in the Second
Schedule:
Provided that where the lessee becomes liable under section 16 to pay royalty for any mineral
removed or 1
[consumed from the area] covered under such lease, he shall be liable to pay either such
royalty or the fixed rent in respect of that area, whichever is greater.
(2) The Central Government may, by notification in the Official Gazette, amend the Second Schedule
so as to enhance or reduce the rate at which fixed rent shall be payable in respect of any area covered
under a production lease and such enhancement or reduction shall take effect from such date as may be
specified in the notification:
Provided that the Central Government shall not enhance the rate of the fixed rent more than once
during any period of three years.
18. Contribution towards International Seabed Authority.—2
[Every lessee shall, in addition to
other payments required under this Act, pay to the Central Government in advance, the amount to be paid
to the International Seabed Authority in respect of the offshore area granted under his production lease
falling in such part of the continental shelf extending beyond two hundred nautical miles, from the
baseline from which the breadth of the territorial sea is measured, towards fulfilment of the obligation of
the Government of India under Article 82 of the United Nations Convention on the Law of the Sea, 1982.]
19. Safety of persons and property.—(1) The permittee, licensee, lessee or any other person
undertaking the reconnaissance operation or exploration operation or production operation under
sub-section (1) of section 5 or any agency undertaking the reconnaissance operation or exploration
operation under the proviso to sub-section (1) of the said section shall be responsible to ensure that the
concerned operation is conducted with due regard to the safety and health of persons including divers and
safety and security of property engaged in the operation.
(2) The Central Government may, by notification in the Official Gazette, declare safety zones in
respect of offshore activities as may be necessary and prescribe the norms for regulating the safety and
health of persons and safety of property engaged in operations authorised under this Act, the
implementation thereof and matters connected therewith.
(3) In the event of any contravention of provisions of sub-section (1) or the norms prescribed under
sub-section (2) by the permittee, licensee, lessee or any other person undertaking the reconnaissance
operation or exploration operation or production operation under sub-section (1) of section 5, or any other
agency undertaking the reconnaissance operation or exploration operation under the proviso to
sub-section (1) of the said section, shall also be deemed to be responsible for such contravention unless he
or it proves that he or it, as the case may be, had taken all reasonable precautions within his or its means
for enforcing those provisions, to prevent such contravention.
3
[19A. Duty of Central Government on mineral conservation and development.—The Central
Government shall take necessary steps, as may be prescribed, for the conservation and systematic
development of minerals in the offshore areas and for the protection of environment by preventing or
controlling any pollution which may be caused by exploration or production operations.]
1. Subs. by Act 17 of 2023, s. 15, for “consumed by him from the area” (w.e.f. 17-8-2023).
2. Subs. by s. 16, ibid., for section 18 (w.e.f. 17-8-2023).
3. Ins. by s. 17, ibid. (w.e.f. 17-8-2023).
12
20. Prevention and control of pollution and protection of marine environment.—(1) Every
holder of the operating rights shall carry out the operations authorised under this Act subject to the
provisions of this Act and the rules made thereunder and any other law and the rules made thereunder, for
the time being in force for the prevention and control of pollution and protection of marine environment.
(2) Every holder of an operating right shall be liable for any pollution of, or damage to, the marine
environment resulting from his activities relating to his operating right in the offshore areas and shall pay
such compensation, as may be determined by the administering authority keeping in view the extent of
pollution or damage, as the case may be.
(3) The Central Government may prescribe measures to be taken for prevention and control of
pollution and protection of marine environment due to activities in the offshore areas.
21. Power of Central Government and administering authority to issue directions.—(1) The
permittee, licensee or lessee shall comply with such directions as the Central Government or the
administering authority may issue, from time to time, for the conservation and systematic development of
offshore minerals, prevention of pollution, protection of marine environment, prevention of coastal
erosion or prevention of danger to life or property including the marine life.
(2) The permittee, licensee or lessee shall comply with such directions as may be issued from time to
time by the competent authority or Coast Guard regarding national security, safety and national integrity.
Explanation.—“competent authority” means the competent authority appointed for the purposes of
sub-section (2) by the Central Government in the Ministry dealing with defence of India.