Royalty Reform Notification; ONGC Shares Rise 5.6%

Government Notifies Revised Royalty Methodologies For Upstream Sector

Mumbai, May 12: Oil and Natural Gas Corporation Ltd shares advanced after the Petroleum and Natural Gas Ministry notified revised royalty rates and methodologies for crude oil, natural gas and casing head condensate under broader reforms linked to the Oilfields Regulation and Development framework.

The reforms notified on May 8, 2026, are intended to create a more stable and predictable framework for India’s upstream hydrocarbon industry. According to Petroleum Minister Hardeep Singh Puri, the revised schedule removes long-standing inconsistencies across multiple royalty regimes.

The minister said the rationalisation exercise follows amendments introduced in 2025 to the ORD Act and related PNG Rules. The revised framework is expected to improve regulatory clarity for exploration and production companies operating in India.

As per government communication, the revised royalty structure seeks to align fiscal terms across producing assets while simplifying compliance obligations for upstream operators.

ONGC Share Price Gains Following Policy Clarity

ONGC share price gained 5.60% to ₹296.65 as of 11:44 am IST on May 12, 2026, compared with the previous close of ₹281, according to exchange-tracked market data.

The stock opened at ₹286.90 and touched a high of ₹299.90 during the session. Investor sentiment strengthened after the royalty notification was viewed as supportive for long-term earnings visibility and investment planning in the upstream energy segment.

The ONGC share price reaction also reflected expectations that a more predictable royalty framework could support future capital allocation decisions and project economics for exploration and production companies.

Market participants tracked the policy development closely given ONGC’s dominant exposure to domestic crude oil and natural gas production.

Company Background

Oil and Natural Gas Corporation Ltd is India’s largest state-owned exploration and production company engaged in crude oil and natural gas exploration, development and production activities.

The company operates onshore and offshore hydrocarbon assets across multiple producing basins and contributes significantly to India’s domestic energy output. ONGC also has interests in refining, petrochemicals, power generation and overseas oil and gas assets through subsidiaries and joint ventures.

According to exchange data, the company had a market capitalisation of about ₹3.74 lakh crore during the trading session.

Conclusion

The revised royalty notification marks a significant regulatory development for India’s upstream oil and gas industry. The policy aims to streamline royalty structures and improve consistency across the sector.

For ONGC and other upstream producers, the move is expected to enhance fiscal visibility and strengthen long-term investment confidence. Investors responded positively to the development as the market assessed the potential operational and financial implications of the reforms.

Source:

• https://x.com/HardeepSPuri/status/2053827026562486397/photo/1
• https://www.nseindia.com/get-quote/equity/ONGC/Oil-&-Natural-Gas-Corporation-Limited