From a Russian dividend windfall and Mozambique LNG restart to deep Andaman drilling and critical mineral finds in Arunachal and Rajasthan, Oil India Ltd is reshaping its portfolio to secure sustained growth.
Oil India Ltd (OIL) sees exploration, overseas business, refining, critical minerals and green energy driving its future growth, Ranjit Rath, Chairman & Managing Director of the country’s second-largest integrated energy company, has said.
The company remains bullish on its Russian assets, which are expected to significantly boost its bottom line in FY2026 and beyond. “The performance of our Russian assets has been superb. We have already received dividends covering about 90 per cent of our investment in Vankorneft and about 80 per cent in Taas-Yuryakh. We are hopeful of recovering 100 per cent of our investment in both these assets,” asserted Rath during a media interaction after the Duliajan-headquartered company’s 66th AGM in New Delhi on Thursday.
OIL holds a 23.9 per cent stake in JSC Vankorneft and a 29.9 per cent stake in LLC Taas-Yuryakh through a joint venture with ONGC Videsh and Bharat PetroResources Ltd.
In Mozambique, where the company owns a 10 per cent stake in the Rovuma Area 1 LNG project, it expects operations to resume from October. “We are hopeful that Mozambique will restart next month, with the force majeure being lifted,” said Rath.
OIL acquired its stake in 2014. However, since 2017, the southeastern African nation has been embroiled in a violent insurgency. On August 27, the presidents of Rwanda and Mozambique signed a peace agreement to end the six-year-long conflict.
Deep Wells, New Discoveries
To offset production decline from mature fields, OIL is banking on domestic oil and gas discoveries. While net production has increased by 3 to 5 per cent, the company is negotiating a year-on-year decline of around 10 per cent. As a result, the net gain stands at only 50 million barrels annually, where it could have been 150 million.
“Drilling activity has grown by 50 per cent, and we have made two discoveries; Mechaki Well 6 yielded crude oil, and Mechaki Well 7 yielded natural gas. Another significant development is the discovery of hydrocarbons on the north bank of the Brahmaputra, opening a new vista for exploration,” said Rath.
OIL is currently drilling deep wells in the shallow offshore waters of the Andaman & Nicobar Basin, and plans to begin exploration in the Kerala-Konkan Basin.
“We have already drilled 31 wells this year. In FY2024-25, we drilled 57 wells and spotted 70. From a mid-range perspective, this is higher than last year, as deeper drilling increases complexity.”
Offshore exploration, including deep vertical wells in shallow waters, is central to the company’s growth strategy. “We achieved a capex of ₹180 billion last year. This year, our target is ₹170 billion-plus. By August 31, we have already achieved 63 per cent of this, driven by investments in Andaman & Nicobar and the northeast, where we have drilled 31 deep wells.”
Under the government’s Open Acreage Licensing Policy (OALP)-IX round, OIL bid for nine blocks and secured all of them. Its exploration acreage now stands at 112,000 sq km, including 40,000 sq km in the deep and ultra-deep waters of the Mahanadi Offshore. Seismic data acquisition is underway.
NRL Expansion & Evacuation
OIL is equally upbeat about its downstream subsidiary, Numaligarh Refinery Ltd (NRL), in Assam, as it nears completion of its capacity expansion and evacuation infrastructure.
“The Numaligarh-Siliguri Product Pipeline (NSPL), currently at 1.5 MMTPA, is being upgraded to 5.5 MMTPA. This will be completed by December, ahead of the Numaligarh Refinery expansion. Post-upgrade, we will need to move the product out of the Northeast.”
Incorporated in 1993 under the Assam Accord, NRL is among India’s most efficient public sector refineries, producing high-quality petroleum products and wax, with growing interests in petrochemicals, biofuels and pipeline infrastructure.
OIL also expects to benefit from the 1,635-km Paradip-Numaligarh crude oil pipeline, which will be among the longest in India once commissioned in Q4 FY2026.
“We also have a ₹70 billion commitment for the foundation stone laying of the polypropylene unit downstream of the refinery expansion programme of NRL,” stated Rath.
Gas Gains
Natural gas has emerged as a strategic growth area for OIL, complementing its oil exploration efforts. The company holds rights in nine geographical areas for city gas distribution (CGD), secured through joint ventures. It recently won CGD licences for Nagaland (with HPCL) and Arunachal Pradesh (with BPCL).
OIL is also monetising the Tulamara field in Tripura, a discovered small field (DSF), as part of its upstream strategy. “To enhance natural gas’s contribution to India’s energy basket, the Duliajan-Numaligarh pipeline is being upgraded from 1 MMSCMD to 2.5 MMSCMD, with completion expected by year-end,” Rath added.
Meanwhile, the North East Gas Grid, implemented by Indradhanush Gas Grid Ltd (IGGL)—a joint venture between OIL, Indian Oil Corp. Ltd (IOCL), Oil & Natural Gas Corp. (ONGC), GAIL and NRL—aims to connect all eight northeastern states through a 1,656-km pipeline network. IGGL strengthens intra-regional connectivity across the Northeast. Its link to the national gas grid is enabled through trunk pipelines like the Barauni-Guwahati line, part of the Urja Ganga scheme.
Critical Minerals, Clean Energy Transition
As part of India’s strategy under the National Critical Mineral Mission (NCMM), OIL has secured two critical mineral blocks for graphite and vanadium in Arunachal Pradesh, and an amalgamated potash and halite block in Rajasthan.
“The graphite and vanadium block has a resource potential of about 5 million tonnes each, while potash is estimated at 25 million metric tonnes. Both are composite licences; we will first carry out exploration and then commence mining.”
OIL has also incorporated a wholly owned subsidiary, Oil India Green Energy Ltd (OGEL), to consolidate its clean energy initiatives. “We have decided to transfer our existing renewables portfolio worth ₹3.8 billion-plus to OGEL. Going forward, all solar and compressed biogas assets will be migrated to OGEL,” said Rath.
The company also has a mandate to establish 25 compressed biogas (CBG) plants across India under its clean energy strategy.
-Manish Pant