OIL charts ambitious growth path, turns focus to offshore frontiers and clean energy

OIL charts ambitious growth path, turns focus to offshore frontiers and clean energy

Bikramaditya Dutta Kakoty

Oil India Limited (OIL), the Maharatna public sector energy major with deep roots in Assam’s oilfields, is preparing for a new phase of expansion, with increased domestic oil and gas production, frontier offshore exploration and emerging clean-energy businesses forming the core of its growth strategy.

The roadmap was outlined by OIL Chairman and Managing Director Dr Ranjit Rath while addressing shareholders at the company’s 67th Annual General Meeting held in Noida on Thursday.

Dr Rath said the company’s immediate priorities would include increasing domestic oil and gas production, accelerating exploration, particularly in deep and ultra-deep-water areas, strengthening its integrated energy value chain and selectively expanding its presence in the clean-energy sector.

The strategy comes at a time when OIL is seeking to sustain production from predominantly mature fields while simultaneously expanding its exploration footprint into newer geological frontiers.

During FY 2025-26, OIL produced 3.450 million tonnes (MMT) of crude oil and 3.186 billion cubic metres (BCM) of natural gas. Despite the maturity of many of its producing assets, the company achieved a terminal crude oil production rate of 10,566 tonnes per day (MTPD), its highest in 14 years.

The improved production performance was supported by intensified drilling, workover operations and reservoir-management initiatives. During the year, OIL completed 74 wells, comprising 22 exploratory and 52 development wells.

The company also improved its Reserve Replacement Ratio (RRR) to 1.02 in FY26, indicating continued efforts to replenish its hydrocarbon reserves. Looking ahead, OIL has set its sights on achieving around 10 million tonnes of oil equivalent (MMTOE) of oil and gas production by the end of the decade.

Offshore exploration emerges as a major growth frontier

One of the most significant elements of OIL’s future strategy is its expanding offshore exploration programme.

With an exploration footprint of more than one lakh square kilometres, the company has a presence across several onshore and offshore sedimentary basins. Its offshore portfolio includes acreage in the Andaman, Krishna-Godavari, Mahanadi and Kerala-Konkan basins, including ultra-deepwater blocks.

The expansion of OIL’s offshore programme comes alongside the Centre’s recently approved Samudra Manthan – National Offshore Exploration Scheme, which carries an outlay of ₹84,084 crore up to FY2030-31.

The national initiative envisages large-scale offshore seismic acquisition, accelerated drilling in deep and ultra-deepwater areas, common offshore infrastructure and the development of domestic manufacturing and service capabilities.

For OIL, the Andaman basin has already provided encouraging indications. At Sri Vijayapuram-2, the company established a natural gas occurrence, while Sri Vijayapuram-3 resulted in a gas discovery with continuous flaring. According to the company, the results provide encouraging evidence of an active petroleum system in the frontier basin.

OIL is now strengthening its deep and ultra-deep-water capabilities through advanced seismic evaluation and technology partnerships, besides preparing for future offshore drilling campaigns.

Strong production momentum continues

The company’s operating performance remained robust in the opening quarter of FY27. Crude oil production increased by 11 per cent year-on-year to 0.950 MMT.

OIL also recorded its highest-ever daily crude oil production of 10,921 tonnes, equivalent to 84,109 barrels.

The company’s financial performance remained strong as well. OIL reported a consolidated profit after tax (PAT) of ₹7,551 crore for FY 2025-26, while its consolidated net worth reached ₹53,716 crore.

The company declared a total dividend of ₹11.50 per equity share. The OIL Group invested more than ₹21,673 crore during the year across exploration and production, refining, pipelines and strategic growth projects.

In Q1 FY27, the company recorded its highest-ever standalone quarterly PAT of ₹2,870 crore.

Refining and pipeline network expanded

Alongside exploration and production, OIL continued to strengthen its integrated energy value chain.

The expansion of Numaligarh Refinery Limited from 3 million tonnes per annum (MMTPA) to 9 MMTPA progressed during the year. The augmentation of the Numaligarh-Siliguri Product Pipeline from 1.72 MMTPA to 5.5 MMTPA was also completed.

The projects are expected to strengthen the petroleum-product supply network and energy infrastructure of the Northeast.

Clean energy gets greater attention

While hydrocarbons remain central to OIL’s business, the company is simultaneously developing a portfolio of lower-carbon businesses under its Net Zero 2040 ambition.

Through OIL Green Energy Limited (OGEL), the company is focusing on Compressed Bio-Gas (CBG), integrated CBG and Waste-to-Energy projects, renewable energy and other low-carbon opportunities.

The recently approved GOBARdhan – National Circular Bioenergy Scheme, with an outlay of ₹23,731 crore, is expected to provide additional policy support for the expansion of the CBG sector.

The scheme provides an integrated framework involving assured offtake, stable pricing, capital assistance, pipeline connectivity, access to finance and technology support. Its coverage of municipal organic waste, besides agricultural residue, cattle dung, press mud and other biomass, also opens opportunities for waste-to-wealth initiatives.

Through OGEL, OIL is progressing multiple CBG projects and exploring municipal solid waste-based integrated CBG and Waste-to-Energy projects.

The company said it had reduced its Scope 1 and Scope 2 emissions by about 18 per cent against the FY24 baseline, while gas flaring had declined by 32 per cent.

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Focus on technology and energy transition

OIL is also seeking to strengthen its innovation ecosystem through the MC² platform, a collaborative PSU initiative aimed at supporting emerging energy technologies and developing indigenous capabilities for the energy transition.

Dr Rath said OIL would continue to focus on increasing domestic oil and gas production, expanding India’s hydrocarbon resource base, building capabilities for frontier offshore exploration and developing scalable new-energy businesses.

At the same time, the company would maintain capital discipline and a strong balance sheet, he said.

The roadmap signals an attempt by OIL to combine its traditional strength in exploration and production with newer opportunities emerging in offshore energy, refining, bioenergy and other low-carbon sectors.

As India seeks to strengthen domestic energy security while gradually transitioning towards cleaner sources, OIL intends to play a role on both fronts – expanding hydrocarbon production in the near term while building capabilities for the energy landscape of the future.

Bikramaditya Dutta Kakoty, Duliajan, September 17, 2026

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