Samudra Manthan: ONGC to scout Category-II basins, No-Go areas and deepwater for its next major finds, says Chairman

New Delhi: Oil and Natural Gas Corporation (ONGC) will direct its exploration effort at Category-II basins, No-Go areas and its deepwater acreage, chairman and chief executive Arun Kumar Singh told shareholders on Monday. He set the strategy against the amendment to the Oilfields (Regulation and Development) Act and the government's Samudra Manthan mission. "Building on this, and on the Hon'ble Prime Minister's Samudra Manthan mission, your Company's exploration strategy will push into Category-II basins, No-Go areas, and our deepwater acreage, where India's next major discoveries await," he said at the company's 33rd annual general meeting.

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Singh described the amendment — which provides for fiscal stability, resource sharing and an expeditious dispute-resolution mechanism — as "a welcome step by the Government of India to reinvigorate exploration and production in the country".

The deepwater effort is being scaled up under an internal programme the company calls Project DeepX. "We have mobilised a specialist taskforce and finalised plans to double our deepwater drilling effort over the next two years, in step with the Government's Samudra Manthan mission," Singh said. ONGC drilled four exploratory wells in the ultra-deep waters of the Andaman Basin during 2025-26 and spudded AND-P-1, the first stratigraphic well under the government-sponsored initiative, on January 27. It spudded its first deepwater well in the Mahanadi Basin on July 25, taking the campaign to a second frontier basin within six months.

Singh said frontier exploration "carries risk that prudence requires us to share", and that the company had deepened engagement with global energy companies on joint bidding and farm-in opportunities.

Rs 40,000 crore going into ageing western offshore fields

Alongside the frontier push, the company is spending to hold output at its established fields. "Across our Western Offshore fields, your Company is implementing a comprehensive improvement programme spanning reservoir and pressure management, enhanced water injection, and pipeline replacement, with projects worth more than Rs 40,000 crore currently under implementation," Singh said. He put a timeline on the returns. "We expect the benefits of these interventions to progressively materialise from FY 2027-28 onwards, in enhanced production and sustained value creation."

Mumbai High sits at the centre of that programme. The field has been in production for five decades, and the company placed the Notice of Award for its Redevelopment Phase-1 Scheme on December 26, 2025. British energy company bp is working alongside ONGC as technical services provider on the scheme, which the company says is envisaged to deliver cumulative incremental production of 2.699 million metric tonnes (MMT) of oil and 2.806 billion cubic metres (BCM) of natural gas by March 2040. bp has since been onboarded as technical services provider for the entire Western Offshore portfolio. "The fields, and the responsibility for them, remain ONGC's own," Singh said.

Production held close to previous year

ONGC produced 20.501 MMT of crude oil and 19.966 BCM of natural gas in 2025-26, including its share from joint ventures, along with 2.561 MMT of value-added products. Singh said this held production close to the previous year's levels despite the natural decline of the principal fields. The company drilled 501 wells during the year, of which 100 were exploratory.

Three new hydrocarbon discoveries were notified in ONGC-operated offshore acreages, and testing during the year established 55 wells as hydrocarbon-bearing, including wells drilled in earlier years. The company acquired 957 line kilometres of two-dimensional and 4,631 square kilometres of three-dimensional seismic data. Across its Open Acreage Licensing Policy blocks, it has cumulatively drilled 79 exploratory wells and made 13 discoveries, the most recent being Vajramani. Reserve accretion in proved-plus-probable terms from ONGC-operated areas stood at 44.01 million metric tonnes of oil equivalent (MMTOE), giving a reserve replacement ratio of 1.17.

Gas production commenced from the Daman Upside Development Project in March, and the company advanced monetisation of the North Karanpura coal bed methane block and the Chinnewala discovered small field in Rajasthan.

Profit fell faster than revenue in 2025-26

Revenue from operations stood at Rs 1,32,508 crore against Rs 1,37,846 crore a year earlier, a decline the company attributed primarily to lower crude oil realisations. Profit after tax fell to Rs 32,894 crore from Rs 35,610 crore. Debt-to-equity stood at 0.02:1 and return on capital employed at 22.46 percent. ONGC contributed Rs 55,865 crore to the national exchequer during the year.

The board declared interim dividends of Rs 6.00 and Rs 6.25 per share and has recommended a final dividend of Re 1.00, taking the total payout to Rs 16,669 crore, or 51 percent of profit. Capital expenditure was Rs 35,878 crore on a standalone basis and Rs 61,131 crore across the ONGC Group. Two major projects were completed at a combined outlay of Rs 1,328 crore, and 17 enhanced oil recovery pilot schemes were approved.

Record standalone quarter, subdued consolidated one

The current year opened differently. Renewed tensions in West Asia firmed crude prices, lifting standalone net profit for the quarter ended June to Rs 17,034 crore — more than double the corresponding quarter — on profit before tax of Rs 22,848 crore, which Singh said is the highest the company has recorded in any quarter. The same prices worked the other way further down the group. "At the same time, the same firm prices weighed on the refining side of our Group and on the Indian consumer, and the consolidated results for the quarter were accordingly subdued," he said. "This is the nature of our business, and it is precisely why your Company has built an integrated structure capable of absorbing price movements in either direction."

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Overseas arm secures Sakhalin-1 stake, Venezuela licence

ONGC Videsh holds participating interests in 29 oil and gas projects across 14 countries. Production from overseas assets was 9.671 MMTOE in 2025-26, comprising 6.908 MMT of crude oil and 2.763 BCM of natural gas. Force majeure was lifted on the Area-1 Mozambique liquefied natural gas project in November 2025, with first cargo now targeted for July 2028. The subsidiary formalised the acquisition of its 20 percent equity stake in Sakhalin-1 LLC on December 5, 2025, following engagement with Russia's energy ministry, and has been granted a specific licence by the US Office of Foreign Assets Control for continued operations at its Venezuelan assets.

In the downstream segment, Hindustan Petroleum Corporation Limited recorded a combined refining throughput of 26.04 MMT, crossed 25,000 retail outlets, and reported standalone profit after tax of Rs 17,175 crore against Rs 7,365 crore. Mangalore Refinery and Petrochemicals Limited processed 16.774 MMT of crude at a gross refining margin of USD 9.22 per barrel, against USD 4.45 a year earlier, and returned a standalone profit after tax of Rs 1,931 crore.

ONGC Petro additions Limited, now a subsidiary, saw earnings before interest, taxes, depreciation and amortisation swing from a negative Rs 203 crore to a positive Rs 1,207 crore. Singh linked the change to a capital restructuring that included an equity infusion of Rs 18,365 crore and the company's move from a Special Economic Zone to the Domestic Tariff Area. ONGC also formed two joint ventures with Mitsui O.S.K. Lines of Japan — Bharat Ethane One and Bharat Ethane Two IFSC Private Limited — to secure long-term ethane transportation for the petrochemical unit. Separately, the government has entrusted ONGC with developing an additional 1.75 MMT strategic petroleum reserve at Mangalore.

Renewables at 2.853 GW against 10 GW target

ONGC Green's renewable portfolio stands at 2.853 GW against a stated goal of 10 GW by 2030. During the year the company awarded a 300 MW solar project connected to the inter-state transmission system for captive use, with the corresponding wind tender awarded on June 5.

Scope-1 and Scope-2 emissions fell 7.26 percent to 8.81 million tonnes of carbon dioxide equivalent, against a net zero target of 2038 for those two categories. ONGC is advancing its first carbon capture and storage pilot at the Gandhar field, envisaging injection of approximately 100 tonnes of carbon dioxide a day into depleted hydrocarbon reservoirs.

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