India needs to boost domestic oil and gas exploration to enhance its energy security amid supply disruptions that drive energy prices higher, according to a senior official at state-owned exploration and production company Oil India Limited (OIL).
“Disruptions to global supply chains and major energy corridors can have an immediate impact on energy flows, prices and economies worldwide,” IOL’s Director of Finance, Abhijit Majumder, said at an energy industry event in India, as carried by local media.
The Strait of Hormuz crisis is one example of how geopolitical instability in one corner of the world could threaten energy security in all other regions, the executive said.
India’s government has an ambitious plan to boost exploration, following three consecutive years in which domestic crude oil production has declined.
This year, the federal government launched the so-called National Offshore Exploration Scheme, with $8.8 billion in government support through FY 2030–31. The scheme is India’s most ambitious offshore exploration mission to date.
As part of the program, the government will provide financial support of up to 50% of the cost of drilling deepwater exploration wells. The support will reduce exploration risk, encourage investment, and accelerate the development of India’s offshore hydrocarbon potential, according to the government.
India’s future hydrocarbon potential lies largely in deepwater and ultra-deepwater basins such as Krishna-Godavari, Cauvery, Mahanadi, and the Andaman region. Exploration in these frontier areas requires advanced technology and significant investment, with a single deepwater exploratory well costing about $125–150 million.
“Recognising the high-risk, high-cost nature of such exploration, the Government is adopting a risk-sharing approach to encourage sustained investment, accelerate exploration, and unlock India’s offshore hydrocarbon resources,” the federal government said.
As part of strengthening energy security, India also plans to build new storage sites as the world’s third-largest crude oil importer looks to boost its resilience to supply shocks.
By Tsvetana Paraskova for Oilprice.com
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