India's ONGC Plans INR 1 Trillion Investment in Deepwater Exploration

en.Wedoany.com Reported - On August 31, A.K. Singh, Chairman of Oil and Natural Gas Corporation (ONGC), stated that the company plans to invest INR 1 trillion, approximately USD 10.5 billion, over the next five years in domestic deepwater and ultra-deepwater oil and gas exploration. Under the current plan, ONGC will drill 87 deepwater and ultra-deepwater wells by March 2031, with 8 wells targeted for fiscal year 2026-2027 and 10 wells for fiscal year 2027-2028.

The investment primarily covers deepwater oil and gas resources offshore India. ONGC stated that the current investment estimate does not yet account for fiscal support provided by the Indian government for deepwater exploration, and the company will decide whether to utilize government funds after the relevant support guidelines are further clarified. The company is expanding its deepwater drilling resource allocation and advancing drilling rig procurement, leasing, and partnership arrangements.

On July 31, the Indian government approved the "Samudra Manthan" National Offshore Exploration Plan, with the first phase running until March 31, 2031, under a total budget of INR 840.84 billion. Of this, INR 432 billion is allocated to accelerate deepwater exploration, supporting the drilling of 60 deepwater exploration wells; eligible wells may receive up to 50% government support on drilling costs, with a cap of INR 6.75 billion per well. The plan also allocates INR 285.34 billion for offshore 2D and 3D seismic data acquisition, data reprocessing, and the application of artificial intelligence tools.

Key deepwater and ultra-deepwater exploration areas designated by the government include the Krishna-Godavari, Cauvery, Mahanadi, and Andaman offshore regions. Government documents estimate the cost of a single deepwater exploration well at approximately USD 125 million to USD 150 million. On July 25, drilling commenced on the MN-DWN18-1-HD appraisal well in the Mahanadi offshore basin, the first of four planned deepwater appraisal wells in the area.

ONGC has also recently increased investment in deepwater drilling equipment. On August 20, Transocean was awarded a two-year contract by ONGC for an ultra-deepwater drillship, with plans to deploy the Dhirubhai Deepwater KG2 drillship for offshore operations in India, expected to commence in the first quarter of 2027, with a base contract value of approximately USD 300 million; the contract also includes a two-year priced option, which, if fully exercised, could extend the drillship's operations into early 2031.