Energy supply shortages due to the West Asia war have put a spotlight on India’s need to ramp up its domestic oil exploration and production efforts. While petrol and diesel supplies remain adequate for now, LPG shortages have persisted, prompting a parliamentary panel to call for an urgent review next week to focus on domestic production. The oil and gas import bill for 2025-26 is expected to cross $120 billion and, given the volatility in global prices and weakening rupee, it’s likely to stay elevated through 2026-27. At less than 1 percent of the proven global reserves, India’s crude stocks do not amount to much compared to that of large producers. Yet, domestic production caters to about 15-18 percent of the country’s substantial demand at present. So, the import reliance will be reduced from over 80 percent if production can be raised at home.
Even though India has 3.36 million sq km of sedimentary basins, just 10 percent is under exploration as several of the 26 frontier and deepwater basins remain underexplored. According to S&P Global Commodity Insights, only four largely-unexplored sedimentary basins could hold up to 22 billion barrels of oil. The government has been trying to raise production, with ONGC investing $10 billion in developing multiple deepwater projects in the Krishna-Godavari basin and Oil India attempting to double its exploration acreage. As the Prime Minister recently noted, India can draw more foreign funds into the energy sector, with a $500-billion investment potential estimated by the end of this decade.
While beefing up investments is essential, India must move to increase production too, as it would reduce import dependency in the near term, ensuring energy security, economic stability and industrial growth. It must be borne in mind that new oil projects have long gestation periods—requiring at least 10-15 years from exploration to commercial production, apart from significant capital. Then there are maturing fields like at Mumbai High and in Assam that have gone past peak production and need recovery efforts through secondary and tertiary techniques. In sum, while India keeps its eyes on transitioning to renewable energy sources, it needs to sharply increase its efforts to produce oil by attracting substantial domestic and foreign investments that can bring in advanced recovery technologies and monetise the resources at a faster clip.
