INTERVIEW: Oil India looks to double exploration area, focus on offshore regions

Oil India Ltd. is aiming to double its exploration acreage in coming years and seeking partnerships to realize the hydrocarbon potential of offshore regions in Indian sedimentary basins, its Chairman and Managing Director Ranjit Rath said.

OIL has already earmarked a huge expenditure budget to push upstream projects following a series of policy reforms -- such as the Open Acreage Licensing Policy, or OALP; National Seismic Program for sedimentary basins, Discovered Small Fields Policy and Enhanced Recovery Policy.

"The strategy of our company is to strengthen our position in the northeastern region, Rajasthan and Mahanadi, as well as enhance our presence in offshore areas in deepwater, specifically in the east coast and Andaman and Nicobar basin," Rath told S&P Global Commodity Insights in an interview, on the sidelines of the India Energy Week in Goa.

Many global oil majors -- such as TotalEnergies, ExxonMobil, Equinor and Baker Hughes -- are presently in discussions with state-owned upstream players for collaboration, Rath added.

Positive momentum

The Indian government in recent years has released no-go areas in the Indian Exclusive Economic Zone for E&P operations covering a total area of 1 million sq km offshore areas in west coast, east coast and the Andaman and Nicobar Islands to provide a boost to the oil and gas exploration, Rath said.

"We are witnessing a very positive momentum in the upstream sector of India, which will further accelerate with government of India's vision of enhancing and expediting exploration in Indian sedimentary basins," Rath added.

The exploration blocks, which were awarded during initial OALP bid rounds, are under drilling phase. OIL has begun its drilling campaign in OALP acreages in Assam Shelf, Rajasthan basin and Mahanadi basin and expects to start exploratory drilling in offshore by the third quarter of fiscal 2024-25 (April-March) for which the rig has been identified, Rath said.

Apart from intensifying our exploration activities in OALP acreages, OIL is aiming to ramp up production of crude oil to more than 4 million mt and natural gas to 5 Bcm annually in the coming years, he added.

OIL has expanded its domestic acreages from 9,300 sq km in 2017-18 to the present acreage of 61,000 sq km, which is roughly a sevenfold increase in area, spread across Assam Shelf, Assam Arakan fold belt, Rajasthan basin, Mahanadi basin, offshore areas in Andaman and Nicobar basin, Kerala Konkan basin and KG basin.

"We are targeting deeper horizons of even more than 6,000 meters in our main producing areas through re-imaging and re-mapping, with the acquisition of new seismic data and with recent evolved technologies," Rath said.

The company is also employing overseas consultants to help discover hydrocarbons in its existing and planned future areas under OALP regime.

"With these efforts, we are very optimistic of a major discovery very soon."

Realignment of upstream sector

Rath said that the global upstream landscape is getting reshaped and realigned following economic recovery post the pandemic, the Russia–Ukraine conflict and the increasing need to transition to cleaner forms of energy.

"Although renewables energy will see the highest growth, oil will continue to hold the maximum share in the primary energy mix. With natural gas being accepted as a transition fuel, towards adopting cleaner form of energy, I visualize overall growth and further investment in oil and gas projects at the global upstream level," he added.

Rath said that India's energy landscape is expected to evolve towards alternate energy at the expense of coal and oil as India pursues it 2070 net-zero goal -- wherein renewable energy is expected to witness a consistent rise across all scenarios as oil demand peaks anywhere between 2030 and 2045.

"Keeping all the above scenarios in mind and our overall inherent strength, we are expecting to achieve 5%-7% of non-fossil energy in our portfolio by 2030, which would be further ramped up to 12%-15% by 2040," Rath added.

OIL forayed into the renewable energy domain in 2012 with the commissioning of Wind Energy Power Project at Ludurva, Jaisalmer and Rajasthan. Until now, OIL has established a total of 188.1 MW -- 174.1 MW of wind and 14 MW of solar -- capacity in the states of Rajasthan, Madhya Pradesh and Gujarat, in addition to about 800 kW of captive solar plants.

OIL has commissioned India's first pilot plant for green hydrogen production in Jorhat in Assam, with plans for scaling up production capacity.

Additionally, OIL is exploring opportunities in geothermal energy, compressed biogas, CCUS and other sustainable energy sectors to diversify revenue streams and align with the changing energy landscape, Rath added.

The upstream producer is also planning to set up 25 compressed biogas plants across India by 2024-25 (April-March).

OIL's subsidiary Numaligarh Refinery Ltd. is also looking to set up a 185 kiloliter/day ethanol plant at Numaligarh through its joint venture Assam Bio Refinery Private Ltd. This bio refinery will use locally grown bamboo as feedstock.