ONGC to spend Rs 1 lakh crore on deepwater exploration, sets up trading unit by year-end

State-run Oil and Natural Gas Corporation (ONGC) Ltd plans to spend Rs 1 lakh crore on deepwater exploration activities over the next five years, targeting the drilling of 87 wells during the period, the company’s management said.

India’s largest upstream firm plans to drill eight deep and ultra-deepwater wells in the current financial year (FY27), followed by 10 wells in FY28, 20 wells in FY29, 22 wells in FY30 and 27 wells in FY31, as the government recently approved a fiscal allocation of Rs 84,084 crore under the Samudra Manthan programme. The management did not clarify whether the annual investment of Rs 20,000 crore would be entirely funded by the company or would also include the government’s share.

ONGC Chairman A K Singh said India urgently requires a discovery to arrest the declining domestic output of crude oil and natural gas. He noted that the company’s Krishna Godavari basin (KG 98/2) crude oil production has declined to 20,000 barrels per day currently, against an estimated peak production target of 35,000 bpd. ONGC plans capital expenditure of Rs 30,000 crore for FY27, compared with Rs 35,878 crore spent last year.

Separately, ONGC is in the advanced stages of setting up a crude and petroleum-product trading company, either in Dubai or Singapore, expected to begin operations by the end of the current year, Singh said. He said the unit is very close to being finalised, with 95% of the work done and only one or two boxes left to tick, though a partner and location for the desk are yet to be decided. The unit will initially handle the group’s own crude and product requirements while also pursuing third-party business, and could create opportunities worth about USD 1 billion a year through better crude sourcing, freight management and risk management. Hindustan Petroleum Corp Ltd, Mangalore Refinery and Petrochemicals Ltd, and an international trading partner ONGC is currently selecting are expected to hold stakes in the trading venture.

ONGC Videsh Ltd (OVL), the company’s overseas arm, is also in talks with US authorities to gain operatorship of its two assets in Venezuela and expects a decision within three months. OVL received the required approval from the US Treasury’s Office of Foreign Assets Control (OFAC) to operate in Venezuela in July 2026.