How does ONGC plan to invest more in prospecting for new oil and gas reserves?

India’s largest exploration company, ONGC, has committed to invest Rs31,000 crore over next 3 years to elaborately explore the sedimentary basins of India for reserves of oil and gas. This has become essential as ONGC has seen a persistent fall in its output in the last 5 years on account of slowing oil output from its mainstay of Bombay High offshore platform. With rising crude prices, exploration has become a priority for India.

The problem gets compounded by the fact that even today nearly 85% of crude dependence is on crude imports. The latest investment plan is to offset the losses in output from its ageing wells as well as to increase the self-sufficiency that India wants to achieve in crude oil. If you compare this capex with the last year it is nearly 50% higher and is a good shift and also sends the right signals to the market about its seriousness in exploration.

In the last few, ONGC had depleted its oil reserves and also its cash reserves with the result that it could not invest substantially in new exploration. Now there is a change and ONGC is currently trying to probe around 1,700 million tonnes of oil and oil equivalent gas by 2025. ONGC plans to use state-of-the-art 2D and 3D seismic surveys as well as modern techniques like fracking and directional drilling to drill over 120 wells by 2025.