State-run Oil India Ltd. is confident that the latest round of exploration policy and plans to amend decades-old policies will draw in more investors to the upstream sector, taking the country closer to newer discoveries and expanding domestic oil and gas output.
Ranjit Rath, chairman and managing director of Oil India Ltd., said the 10th round of the Open Acreage Licensing Policy (OALP X)—unveiled during India Energy Week—and proposed changes to the Oil Fields (Regulation and Development) Act of 1948 will act as catalysts for upstream growth.
"OALP X is set to give a big push to India's upstream sector. This comes at a time when India is making its upstream policies more attractive to global participants. We are hopeful that OALP X will not only help evince interest among global participants but should help the country to inch closer to newer discoveries," Rath told S&P Global Commodity Insights.
Upstream companies can now carve out areas for oil and gas exploration under OALP, which allows explorers to express interest in any area throughout the year. The areas earmarked are then auctioned.
OALP X is the largest bid round in terms of acreage offered in a single bid round. The 10th round offers 25 blocks with an area of 191,986 sq.km and spans 13 sedimentary basins. Of the 25 blocks, six are in shallow water, six on land, one in deepwater and the remaining in ultra-deepwater areas.
"There is a favorable environment for investment in exploration opportunities in India by virtue of significant policy reforms and far-reaching decisions such as releasing approx. 1 million sq km of erstwhile no-go areas in the east coast, west coast and Andaman basin, including the special incentives for the Category II & Category III basins," Rath said.
"Multiple international and national oil companies are looking at new E&P opportunities under the high energy demand scenario, stable geopolitical regime in India and are having dialogues with Indian upstream players for collaboration," he added.
Pockets of growth
According to analysts at Commodity Insights, the Category II and III basins in India, including Mahanadi, Andaman Sea, Bengal, and Kerala-Konkan, remain largely unexplored to date. The estimated undiscovered hydrocarbon potential in these four basins is approximately 22 billion barrels of oil equivalent.
The Parliament's upper house Rajya Sabha passed Dec. 3 a bill seeking to amend the Oil Fields (Regulation and Development) Act of 1948 by expanding its scope to include shale oil, shale gas and coal bed methane, in addition to oil and gas, while proposing a series of other changes to the decades-old act -- such as freedom to pursue international arbitration in the event of disputes, as well as offering a longer lease period. The amendment still needs to be passed in the lower house of the Parliament, the Lok Sabha, to become law.
Rath said OIL had expanded its domestic acreages from about 9,300 sq. km. in 2017-18 to present acreage of about 60,000 sq. km, 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.
The company aims to double its exploration acreage in the coming years, with 50% of it in the offshore region.
"The exploration blocks, which had been awarded during initial OALP bid rounds are under drilling phase. We spudded our first offshore well under the OALP regime in the Andaman and Nicobar Basin in November 2024, and our drilling campaign in OALP acreages in the Assam Shelf, Rajasthan basin and Mahanadi basin is under progress," Rath said.
During IEW, Oil India inked a deal with Brazil's Petrobras to collaborate on the exploration and production of hydrocarbon resources in India's offshore regions as the state-run upstream producer looks to boost oil and gas output at home.
"We are reaching out to international oil companies for potential collaboration and partnerships for realizing the hydrocarbon potential of offshore regions of Indian sedimentary basins and we are in advanced stages to finalize some collaborations," Rath said.
Diversification drive
Rath said that the company was also diversifying through its subsidiary, Numaligarh Refinery Ltd., which had embarked on an integrated expansion project to boost its capacity from 3 million mt/year to 9 million mt/year. The project also includes setting up a crude oil import terminal at Pardeep Port and laying about 1,640 km of pipelines to transport imported crude oil.
He said that even though oil demand growth in the country would maintain a positive trajectory until 2050, it was imperative to diversify its portfolio to adapt to a changing energy landscape.
OIL expects to achieve 5%-7% of non-fossil energy by 2030, which will be ramped up to 12%-15% by 2040, Rath said.
Commenting on the global upstream outlook, Rath said the landscape was being reshaped and realigned against the backdrop of geopolitical developments while at the same time addressing climate concerns and transitioning to cleaner energy.
"We observe a reversal of the earlier outlook that believed in a forced transition to cleaner fuel, to a more healthy and practical transition prioritizing energy security and growth for all. Therefore, we do not see much challenge for the upstream oil and gas industry," Rath added.
