India’s largest oil and gas producer is preparing one of its biggest exploration drives in years. Oil and Natural Gas Corporation, or ONGC, plans to invest about ₹1 lakh crore over the next five years in deepwater and ultra-deepwater exploration, with 87 wells targeted by March 2031 as the company searches for the large new discoveries India needs to slow the decline in domestic hydrocarbon output.
Chairman and CEO Arun Kumar Singh outlined the plan on August 31, alongside two other moves that broaden ONGC’s energy-security role: a proposed 1.75 million-tonne strategic petroleum reserve in Mangalore and an international crude and petroleum-products trading platform that could be based in Dubai or Singapore. Taken together, the projects show ONGC trying to do more than simply drill for oil. It is building a wider system around exploration, storage, sourcing and trading.
What ONGC has announced
The headline number is the planned ₹1 lakh crore investment in deepwater and ultra-deepwater exploration over five years. ONGC intends to drill 87 wells by March 2031, beginning with a smaller number in the current financial year before accelerating activity as rigs, services and geological data are lined up.
Deepwater drilling is far more expensive and technically demanding than drilling on land or in shallow offshore areas. Wells can require specialised drillships, high-specification equipment and long development timelines, while exploration risk remains high because even an expensive well may not lead to a commercial discovery. ONGC is nevertheless betting that India’s offshore basins contain large resources that have not yet been fully tested.
The company is also moving ahead with a 1.75 million-tonne strategic crude reserve at Mangalore. ONGC says the land is available and business models are being worked out, with construction expected to begin after the remaining approvals and structuring are completed.
Why India is pushing deeper offshore
The wider policy backdrop is the government’s Samudra Manthan, or National Offshore Exploration Scheme, approved with an outlay of ₹84,084 crore through FY2030-31. The programme is designed to reduce the financial and infrastructure risks that have held back deepwater exploration, including the cost of seismic surveys, exploratory wells and shared offshore infrastructure.
The government says the programme aims to raise domestic oil and gas production and expand India’s hydrocarbon resource base. That matters because India remains heavily dependent on imported crude. Every large domestic discovery can improve supply security, reduce exposure to global shipping disruptions and soften the economy’s vulnerability to sudden spikes in international oil prices.
India has strengthened some of its external buffers, including foreign-exchange reserves that recently reached a record $729.3 billion. But oil remains a structural pressure point because higher crude prices can widen the import bill, affect the rupee and feed through into inflation. More domestic production cannot eliminate that exposure, but it can reduce it at the margin.
Why 87 wells is an important number
Exploration is ultimately a numbers game. A company can have promising seismic data and geological models, but commercial reserves are proven only after drilling. Increasing the number of deepwater and ultra-deepwater wells gives ONGC more chances to identify fields large enough to justify development.
ONGC reported three new hydrocarbon discoveries in operated offshore acreage during FY26 and said testing established dozens of wells as hydrocarbon-bearing. It has also built a larger inventory of seismic data and exploration acreage under India’s Open Acreage Licensing Policy. The new spending plan is intended to convert more of that geological knowledge into drilled prospects.
The risk is equally clear. Deepwater wells can cost hundreds of crores of rupees each, and a discovery still requires appraisal, development infrastructure and years of additional spending before production begins. Investors should therefore view the ₹1 lakh crore figure as an exploration commitment, not as a guarantee of equivalent new reserves or near-term production.
The Mangalore strategic petroleum reserve adds another layer
ONGC’s planned 1.75 million-tonne crude reserve in Mangalore addresses a different problem: what happens when oil is available globally but India faces a temporary supply disruption, shipping bottleneck or geopolitical shock. Strategic petroleum reserves allow a country to hold crude that can be released during emergencies rather than depending entirely on just-in-time imports.
Mangalore is a logical location because India already has strategic storage and major refining infrastructure on the west coast. ONGC also controls assets in the region through the Mangalore Special Economic Zone and its group companies. The proposed reserve could therefore integrate with existing port, pipeline and refinery logistics more easily than a completely new standalone location.
The project fits a broader effort to strengthen India’s energy resilience across multiple sources. The government is simultaneously trying to expand domestic hydrocarbons and reshape rules for nuclear power investment and reactor deployment, while renewable capacity continues to grow. The common objective is to reduce the economic damage caused by dependence on any single imported energy source.
Why ONGC wants an international oil trading desk
The third major piece is ONGC’s plan to establish an international crude and petroleum-products trading platform, with Dubai and Singapore being evaluated as possible bases. The company says most preparatory work is complete and wants the platform operational by the end of FY2026-27.
Today, different ONGC group companies participate in crude sourcing, refining and product sales. A central trading operation can aggregate volumes across ONGC, HPCL and MRPL, negotiate larger cargoes, optimise freight, manage price risk and potentially trade third-party barrels. ONGC has indicated that the opportunity could create substantial annual value if the platform reaches scale.
Dubai and Singapore are both established global energy-trading centres with deep pools of traders, banks, shipbrokers and risk-management specialists. Locating the unit in one of those hubs would put ONGC closer to counterparties and market infrastructure than managing all international trading from India.
What the plan means for ONGC and investors
For ONGC, the deepwater programme is strategically necessary but financially demanding. The company must fund exploration while maintaining production from mature fields, redeveloping major assets such as Mumbai High and supporting group businesses. That means capital discipline will matter as much as geological success.
For investors, the key indicators will be the pace of drilling, discovery announcements, reserve replacement, development decisions and whether production from new offshore fields can eventually offset declines elsewhere. The trading platform and strategic reserve are additional opportunities, but the core value driver remains ONGC’s ability to find and commercially produce more oil and gas.
The macroeconomic stakes are also significant. India’s growth outlook remains strong enough for S&P to retain its BBB sovereign rating with a stable outlook, but energy imports remain one of the channels through which global shocks can affect inflation, the current account and government finances. Successful domestic exploration would improve that equation over time.
What happens next
The first near-term milestone is execution. ONGC needs to secure drillships, services and technical capacity for a sustained multi-year deepwater campaign. The company has already signalled that drilling intensity will rise over the next several years, so tender awards and rig mobilisation will show whether the schedule is on track.
The second is the Mangalore reserve. ONGC still needs to finalise the commercial and operating structure, after which construction timelines and funding details should become clearer. Because the reserve is meant to support national energy security as well as potentially offer commercial flexibility, the rules governing ownership, filling and emergency release will be important.
The third is the international trading unit. A formal launch, choice of location and details on participation by HPCL and MRPL would show how ambitious the platform will be. If it grows beyond internal group optimisation into third-party trading, it could become a meaningful new business line.
The larger question will take years to answer: whether India’s renewed deepwater push actually produces major commercial discoveries. The spending announced on August 31 raises the odds by putting far more wells into the ground. But geology will decide the outcome. For India, that makes ONGC’s ₹1 lakh crore plan both a major industrial investment and a calculated bet on finding enough domestic energy beneath deeper waters to materially strengthen the country’s long-term energy security.
