State-run ONGC is lining up more than ₹1.07 lakh crore of investment in deepwater exploration and strategic crude storage, while preparing a 50-million-tonne (MT) global trading platform and seeking a bigger operating role in Venezuela, in a major expansion across exploration, energy security and international oil markets.
The state-run explorer plans to invest ₹1 lakh crore over five years to drill 87 deepwater and ultra-deepwater wells by March 2031. ONGC expects to drill about seven deepwater wells this year and 10 next year, before sharply scaling up activity once additional seismic data becomes available.
The programme comes alongside the government’s ₹84,000-crore offshore exploration support initiative, which ONGC expects will help generate better 2D and 3D seismic data and enable substantially higher drilling in frontier acreage. “We believe that the frontier that is awaiting us is deep water and ultra-deep water,” Chairman and CEO Arun Kumar Singh told reporters after the company’s annual general meeting.
Deepwater and ultra-deepwater basins are offshore zones with very high water depths. India’s eastern and western offshore basins extend to depths of up to 3,000 metres and are estimated to hold more than 5,600 MMTOE of hydrocarbon potential, according to the Union ministry of petroleum and natural gas.
ONGC has so far bagged about 68% of the total deepwater acreage awarded up to the ninth round of bidding under the Open Acreage Licensing Policy (OALP), giving it a dominant position as India steps up exploration of deeper offshore prospects.
ONGC will separately invest around ₹7,000 crore to build a 1.75-million-tonne strategic petroleum reserve at Mangalore, adding roughly one-third to India’s existing dedicated emergency crude-storage capacity of 5.33 million tonnes.
The land has already been acquired and construction is expected to begin shortly. “The business models are being worked out… we will very shortly commence the process for construction,” Singh said.
The company is simultaneously close to setting up an overseas oil and gas trading joint venture, with Dubai and Singapore under consideration. The proposed unit could trade about 50 million tonnes of crude, refined products and gas annually, apart from third-party volumes.
“We are very close to it. Already 95% work is done. We are waiting for one or two boxes to be ticked,” Singh said. The partner and final location are yet to be decided, with ONGC aiming to have the platform in place by the end of the year.
The trading business will combine purchases, sales and third-party transactions, giving ONGC group companies a common commercial interface in international markets rather than sourcing and selling independently.
On ONGC Videsh’s Venezuela plans, Managing Director Rajarshi Gupta said the company, after receiving an OFAC licence in July, is in discussions with Venezuelan authorities to finalise the operating framework. The framework is expected to be in place within three months, paving the way for further progress on its exploration and production plans in the country.
Shares of ONGC closed at ₹232 on the BSE on Monday, down 0.09% from the previous close.