How ONGC’s Overseas Projects Help India Secure Oil and Gas Supplies

Overview

ONGC is executing several oil and gas exploration projects overseas through its fully-owned subsidiary, ONGC Videsh which produced 9.76 million metric tons (MMT) of crude oil and 5.23 MMT of natural gas in 2020. The company has procured participating interest in 35 oil and gas assets located in 15 countries spread across all the continents barring Australia. ONGC Videsh contributed around 30.3% of crude oil and 23.7% of natural gas to India's domestic production in 2019-20. The company is constantly looking for viable deposits of oil and gas in different parts of the world and its personnel are braving different kinds of hazards to prospect for oil and gas in order to secure India's supply.

The overseas oil and gas assets of ONGC

ONGC Videsh has acquired substantial stakes in oil and gas fields where it is carrying out exploration work. Also termed as 'assets' in oil and gas industry jargon, these fields are located in countries as distant as the Russian Far East and the Atlantic coast of South America. ONGC Videsh partnered with several global stakeholders in exploring these potentially rich fields for oil and gas. The output from these fields are considered India's domestic production because of the strategic equity stakes of ONGC Videsh in these oil and gas fields.

The market for acquiring such strategic oil and gas assets is quite competitive with several other global corporations especially from major oil consuming countries also trying to acquire stakes to secure their supplies. At the same time, there is the risk of investments not yielding the estimated returns or even half of it. This makes it an extremely challenging goal for ONGC Videsh to save precious foreign exchange by producing sufficient quantities of oil and gas from these distant overseas fields. Many of these fields are in places that are torn by war which is even more challenging.

ONGC Videsh has the technical expertise

As India’s premier oil and gas producer, ONGC hires the best available talent from the country’s top educational institutions. Over the years, the company has spearheaded the country’s quest for oil and gas both at home and abroad. In this endeavour, the company has partnered with several leading oil and gas producing corporations and exchanged vital experience and technological capabilities. As a result, ONGC has acquired the full range of technical, logistic, managerial and strategic capabilities to explore oil and gas anywhere in the world.

From acquisition, processing and interpretation (API) of seismic and non-seismic data to on-land as well as underwater exploration capabilities, ONGC is today a repository of the best and most advanced technologies in the oil and gas industry. One very special capability that ONGC has developed over the years is in developing a highly advanced method of logging, considered to be the "eye" of oil and gas exploration that helps geologists to study the formation and characteristic of reservoirs. The Committee of ONGC Institutes (COIN) manages 12 globally renowned research and technology development institutions that have now become the backbone of the country's oil and gas industry.

Fulfilling the country's strategic needs

The bulk of oil and gas produced internally and imported by India, is consumed by the automobile, railways, airways and shipping industries. India’s domestic production is too less to meet even one-fifth of her requirement and there is an urgent need to raise the volume of domestic production. As the country’s flagship E&P company, ONGC along with subsidiaries like ONGC Videsh is committed to explore for more oil and gas all over the world to reduce India’s import dependency. Such dependency severely limits the country’s strategic space in international relations.

ONGC Videsh is making all out efforts to reduce India’s traditional dependence on oil and gas from the Gulf countries in the Middle East by prospecting and exploring for oil in non-traditional areas. Today, the company is exploring and producing oil from fields spread across different continents from South America to eastern Siberia. ONGC aims to meet 50% of the demand for oil and gas in the country with indigenous production by 2050 and for that it will prospect and explore every corner of the world. ONGC Videsh is trusted by global partners for its expertise and experience built over decades.

Conclusion

India’s economic growth depends on the fast and easy movement of goods from one corner of the vast country to another, which in turn, depends on efficient transportation. The entire transportation system across land, water and air also known as multi-modal mode of transport, runs on petroleum products like petrol, diesel and jet fuel. For a country of India’s size, which is the world’s 5th largest economy as per exchange rate mechanism and 3rd largest as per purchasing power parity (PPP) mode of calculation, double digit growth is critical. Securing the country’s supply of oil is a challenge that primarily rests on the shoulders of ONGC and its subsidiaries like ONGC Videsh, which owns oil and gas fields in different parts of the world. This is done to increase India’s indigenous production of oil and gas and reduce her dependence on imports.