New Delhi: To reverse its flat output, India's largest oil and gas producer, Oil and Natural Gas Corporation (ONGC), is planning a dive into the deep and ultra-deepwaters along India's coastline, backed by a plan to invest Rs 1 lakh crore through FY2030-31, Chairman Arun Kumar Singh said at a press briefing on Monday. "We are banking big on deepwater exploration. We believe that the next big frontier awaiting us is deep water and ultra-deep water," Singh said.
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He also admitted that ONGC needs a big discovery, and that without one the Maharatna PSU's operational and financial performance will more or less stay flat. "To achieve 20-30 percent growth, ONGC needs a big discovery. Or the production will continue to be a flat line," said Singh. Referring to Brazil as an example, the ONGC Chairman said India's offshore deepwater area is bigger than Brazil's. "Brazil today produces upwards of 2.5 million barrels a day from deep water. So, one of the things that we need to do is to explore deep water areas."
Asked how much had been earmarked for each year, Singh said the company would spend around Rs 20,000 crore every year through FY2030-31 on its deepwater drilling programme. The oil major's capex for FY2025-26 stood at Rs 35,878 crore, of which it spent Rs 9,496 crore on development drilling and Rs 7,069 crore on exploratory drilling. For FY2026-27, the company has revised its capex downward by around 16 percent to Rs 30,000 crore. Of that, it plans to spend around 20 percent or Rs 6,095 crore on exploratory drilling and 30 percent or Rs 9,055 crore on development drilling.
Asked whether part of the figure would be funded by the Rs 84,000-crore Samudra Manthan programme approved by the Cabinet at the end of July, the ONGC CMD said the investment plan was a commercial call. "We don't know. We may not take (funding from the government). It is a commercial call. It is not a subsidy. Let the fine print come. We will know when the fine print comes. It is still in the making. The only thing we know right now is that the government has allotted this money. That's it."
ONGC has set a target of drilling 87 wells in deepwaters and ultra-deepwaters until FY2030-31. In FY2025-26, the company drilled four wells. In FY2026-27, it plans to drill eight wells, 10 in FY2027-28, 20 in FY2028-29, 22 in FY2029-30 and 27 in FY2030-31.
Pressed on the persistent underperformance of the KG Basin, Singh defended the company's continued spending there and cast the block as a learning exercise whose value lies beyond its own output. "It is a complex reservoir. In such reservoirs, you can be this side or that," he said. He pointed to the fate of an earlier operator in the same basin as evidence of how unpredictable the geology has proved. "You know that a private company went up to 69 MMSCMD in 2010 in the same basin. In 2018, it dropped to zero." What ONGC takes away from the block, he argued, will apply well beyond it. "If India succeeds in deepwater, the knowledge of the 98/2 block will be an investment. If we learn from it well, we will know where to produce and how much, everywhere in deepwater in the Eastern Offshore. This is an investment for life."
On Venezuela, where ONGC Videsh received a specific licence from the US Office of Foreign Assets Control (OFAC) in July, the company said both its assets remain with it — a 40 percent interest in one and 18 percent in the other — and that the objective now is to become the designated operator. Negotiations are under way on fiscal terms, operating terms and the subsurface conditions for evacuation, and ONGC expects to announce something within the next three months. Asked whether US companies moving into Venezuela could displace ONGC Videsh from operatorship, the company noted that more than 25 to 30 joint ventures are operational in the country, and said what two countries discuss between themselves is for them to settle.
Asked whether the West Asia crisis had forced a rethink, and whether ONGC's money would now go into maintaining oil and gas assets or into clean energy, Singh said the company saw no reason to move away from its core. "We don't see any need to tweak our strategy, particularly as an oil and gas company, to move away from oil and gas," he said. "In fact, you will notice that most of the international oil companies have come back to oil and gas. For the simple reason that whatever you do, on the energy equivalence basis, oil and gas is going to be the cheapest."
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What lets ONGC hold that position through a price cycle, Singh said, is the shape of the group itself. Roughly 60 percent of it now sits in exploration and production and 40 percent outside it, across HPCL, MRPL and OPaL. "ONGC is the only truly integrated national organisation," he said. "If E&P does well, it can take care of downstream losses. If upstream does badly, then downstream does very well. So we have both sides." That is why, he argued, the consolidated bottom line barely moves — it came in at around Rs 49,000 crore this year."We are ready for a world where crude oil could cost as low as USD 60 or as high as USD 90 a barrel," said the CMD.