Oil and Gas in India
ONGC and Upstream Exploration
How state-owned ONGC finds and produces most of India's oil and gas, the economics of exploration risk, and why domestic output has stagnated.
Upstream means finding and producing oil and gas.
ONGC
- The Oil and Natural Gas Corporation (ONGC), founded in 1956, is India’s largest producer.
- Oil India Limited operates mainly in the Northeast.
- Private firms like Reliance and Cairn (Vedanta) also produce.
Exploration risk
- Drilling costs millions of dollars per well.
- Many wells find nothing.
- Big discoveries can be very profitable.
Stagnating output
- Many Indian fields are ageing and declining.
- Geology: India has fewer large oil discoveries than the Middle East.
- Investment in exploration has been limited.
Cairn’s Rajasthan find
Cairn discovered the Mangala field in Rajasthan in 2004, one of India’s largest onshore finds.
ONGC Videsh
ONGC’s overseas arm, ONGC Videsh, invests in fields in Russia, Mozambique and elsewhere.
The dry well
ONGC drills an expensive offshore well that finds no commercial oil, a common outcome in exploration.
Thinking exploration always finds oil
Many wells find nothing, making it risky.
Key takeaways
- ONGC is India's largest oil and gas producer.
- Exploration is expensive and risky.
- Many Indian fields are ageing.
- Cairn's Mangala field was a major 2004 discovery.
No recording for this one yet - EconReader can read it aloud for you.