India’s Oil and Pure Fuel Corp. is getting ready to wager billions of {dollars} on deepwater and ultra-deepwater exploration, boosting spending in a push that would assist one of many world’s high oil importing nations scale back reliance on abroad provide.
“Onshore we have now kind of drilled, appraised or acquired knowledge in many of the basins,” Sushma Rawat, director of exploration for the state-owned large, stated in an interview. “However there are nonetheless giant tracts offshore the place we have now very sparse knowledge, the place nearly no wells have been drilled.”
India, with a fast-growing urge for food for crude, is keen to cut back its gas import invoice and bolster power safety, and has inspired corporations like state-controlled ONGC to do extra to faucet home oil and gasoline reserves. It’s of venture that, if profitable, would yield rewards for producers and for a authorities seeking to scale back its abroad dependence.
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Rawat stated ONGC plans to bid aggressively in upcoming authorities auctions to extend its exploration acreage to 500,000 sq. kilometers (193,050 sq. miles) by March 2026, from round 163,000 sq. kilometers right this moment. Annual spending will rise to 110 billion rupees ($1.3 billion) from an annual 70 billion to 80 billion rupees.
For ONGC, the exploration push can be about countering a decline in manufacturing. Within the decade to the tip of March final yr, oil output dropped 17.5% to 19.6 million tons, whereas gasoline shrank simply over 10% to twenty.9 billion cubic meters — a decline that has left India weak to surging import prices.
ONGC accounts for 66% of India’s oil output and 58% of its gasoline. That’s partly offshore, however in shallow waters. The one producing deepwater venture is its KG-DWN-98/2 block within the Krishna Godavari basin. Crude oil output there is because of begin in Could — effectively previous the unique goal of 2019.
Prime Minister Narendra Modi’s authorities had set a purpose of chopping imports by 10% by 2022 and halve them by 2030, however missed the primary goal, with import dependence growing as a substitute. No recent objectives have been publicly introduced, however India final yr launched practically a million sq. kilometers of acreage beforehand closed to exploration for navy, environmental and different causes.
Rawat and officers at ONGC wish to leverage the chance, attempting to hurry up efforts by hanging a string of partnerships with Exxon Mobil Corp., Chevron Corp. and TotalEnergies SE. ONGC holds simply over half of the nation’s leased exploration acreage, making it an interesting associate.
Now the problem for ONGC is to show broad agreements into tangible exploration alliances, stated Angus Rodger, upstream analysis director for Asia Pacific at Wooden Mackenzie: “The Indian authorities needs to see new partnerships emerge, between Indian gamers and the perfect worldwide explorers.”
The worldwide oil majors, cautious of the dangers related to India’s offshore potential, are pushing for higher circumstances from the Indian authorities, Rawat stated, together with with the addition of clauses on arbitration, reassurance across the stability of the fiscal regime and on prison legal responsibility.
