Oil India open to higher Venezuela investment as output prospects improve, says CMD

New Delhi: Oil India Limited (OIL) is monitoring developments in Venezuela and is open to increasing investments if production improves at the Carabobo project, Chairman and Managing Director Ranjit Rath said in an interview to CNBC TV18. Oil India holds a 3.5 percent stake in the Carabobo field through its subsidiary, with an investment exposure of about USD 60 million. Rath said there are no pending dividends linked to the Venezuelan asset.

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“We will wait and watch the developments,” Rath said, adding that production prospects at the field “now look better”. He said the company would invest further if required to support higher output.

Russian dividends largely realised; no divestment plans

On Oil India’s overseas assets in Russia, Rath said the company has largely received dividends from its joint ventures. “As far as our investments in Russia are concerned, we have already got 100 percent dividend out of one asset and about 90 percent from the other,” he said. The remaining amount is held in local accounts due to transaction restrictions and can be deployed later for overseas investments.

“There is no sanction on our operations,” Rath said, adding that Oil India does not plan to divest its Russian assets.

Drilling activity up sharply; output guidance raised 2–2.5%

Rath said Oil India has already completed more than 50 wells this year and is targeting around 80 wells, compared with 30–35 wells drilled three years ago. The company aims to cross 70–75 wells in the current year.

“Our guidance this year would be about 2–2.5 percent more,” he said. Oil India produced 6.71 million metric tonne of oil and oil equivalent last year, its highest so far, and expects to surpass that level again.

The company plans to drill around 100 wells next year and has prepared an inventory of over 200 wells for the next three years, Rath added.

Numaligarh expansion begins; Rs 40,000 crore capex

Rath said commissioning of the expanded Numaligarh Refinery capacity of 9 million tonne began on December 31. The crude distillation unit is already operational, while full commissioning will take six to nine months, followed by a stabilisation phase.

The total capital expenditure for the expansion, including the refinery, crude pipeline and polypropylene unit, is estimated at around Rs 40,000 crore.

“For FY27, 40 to 50 percent capacity utilisation is a fair assumption,” Rath said, adding that distillate yield is expected to remain above 87 percent.

Prepared for geopolitics, confident on growth

On crude markets, Rath said Oil India factors geopolitical risks into its decision-making framework. Higher drilling intensity and exploration activity underpin confidence in production growth over the next few years, he said.

“We are comfortable with our production outlook,” Rath added.

Oil India currently has a market capitalisation of about Rs 68,642.85 crore. The stock has declined over 7 percent over the past year.

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