ONGC unveils Rs 1 lakh crore deepwater exploration plan
State-run Oil and Natural Gas Corporation (ONGC) plans to invest around Rs 1 lakh crore in deepwater exploration over the next five years and drill 87 wells by FY31, Chairman and CEO Arun Kumar Singh announced on Monday. The move is part of India's push to accelerate deepwater exploration under the government's Samudra Manthan programme.
Singh outlined the investment and drilling targets at the company's annual general meeting, linking the plans to the Union Cabinet's approval in July of the Samudra Manthan (National Offshore Exploration Scheme) with a total outlay of Rs 84,084 crore.
The scheme covers the preparatory year FY27 and implementation from FY28 to FY31, and includes large-scale acquisition, processing and interpretation of high-quality seismic data, accelerated deepwater and ultra-deepwater exploratory drilling, scientific drilling in frontier basins, development of common offshore production and evacuation infrastructure, and establishment of an integrated Oil & Gas Manufacturing and Services Zone.
Drilling ramp-up and targets
ONGC plans to gradually increase its deepwater drilling activity, from four wells in FY26 to eight in FY27, ten in FY28, twenty in FY29 and twenty-two in FY30. The remaining 23 wells would be drilled in FY31, bringing the total to 87.
"A big frontier is deep and ultra deepwater, this is a huge area for India. Our sedimentary basin is bigger than Brazil. One of the things we need to do is explore deepwater wells," Singh was quoted as saying.
Investment and funding
The company will invest around Rs 20,000 crore of its own funds in the Samudra Manthan scheme, with the government providing incentives under the approved outlay. Singh noted the scheme's potential to add more than 600 million tonnes of oil equivalent (MTOE) to India's hydrocarbon reserves, with a projected increase of 10-15 MTOE annually, potentially reaching 20 MTOE at peak.
Deepwater exploration is expensive and requires large investments, Singh said, adding that the company is increasing drilling activity to collect more geological data and get a clearer picture of India's offshore resources.
"We should be able to get very good data for three-four years and drill a good number of wells to reach a conclusion about how much we have and how much we don't have," he said.
Technical partnerships and infrastructure
Singh said technology was no longer a major challenge for deepwater exploration, and ONGC has signed an agreement with Shell for technical expertise and commercial support. The company is also open to partnerships with other international firms.
The chairman also said the company is working on business models for construction of its proposed 1.75 million tonnes strategic reserve for crude oil in Mangalore and expects to commence construction soon.
"The government has asked us to build a 1.75 million tonnes of crude oil strategic reserve. Mangalore Special Economic Zone is ONGC controlled. There is already a plan for which work is done earlier. Business models are being worked out and we will shortly commence the process for construction," Singh said.
ONGC has also set a capex target of Rs 30,000 crore for FY27, with Rs 9,055 crore allocated for development drilling and Rs 6,095 crore for exploratory drilling, as reported by Moneycontrol. The company expects to set up its international crude and products trading platform by the end of FY 2026-27, with Dubai and Singapore under consideration as its base.
Singh added that the success of deepwater projects will depend on the size of oil and gas discoveries and whether they are commercially viable.