From dunes to diesel: How Thar desert is powering India

As the Strait of Hormuz disruption continues to throw the global energy landscape into a tailspin, India has found a sliver of hope in its very own Thar desert. Rajasthan’s Baghewala, Jaisalmer and Bakhritibba, and Dandewala with leases for Oil India Limited (OIL) are powering India’s energy needs. 

OIL has also ramped up crude production in Thar desert, achieving a record output of 1,202 barrels per day from the Jodhpur sandstone formation. It has increased production by around 70 per cent compared to last year’s 705 barrels per day. 

Crude oil produced in the Baghewala field in Jaisalmer is transported by tankers to Oil and Natural Gas Corporation (ONGC) facilities in Mehsana, Gujarat. From there, the oil is sent via pipeline to the Koyali refinery operated by Indian Oil Corporation Ltd (IOCL).

In the financial year 2025-26, Oil India's Rajasthan field recorded an annual crude oil production of 43,773 metric tonnes, up from 32,787 metric tonnes the previous year. This growth reflects advancements in technology and efficient operations.

The Baghewala oil field, located in the Bikaner-Nagaur sub-basin of the Rajasthan basin, is among the few onshore heavy oil fields in India. Oil India completed Cyclic Steam Stimulation (CSS) operations in 19 wells, marking a 72 per cent increase from last year, and drilled 13 new wells during the year, up from nine.

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Officials explained that due to the high viscosity of crude in the region, conventional extraction methods were not viable, leading to the adoption of innovative approaches like diluent injection and artificial lift systems.

Oil India has been producing heavy crude from the Baghewala field since 2017. The field, discovered in 1991 and covering 200.26 square kilometres, currently has 52 wells, with 33 operational. The successful implementation of CSS technology, first piloted in 2018, has enabled large-scale extraction and set new standards in thermal enhanced oil recovery in India. Officials stated that this achievement will help reduce India's dependence on imported crude and enhance long-term energy resilience.

OIL also discovered commercially viable gas fields at Tanot, Dandewala and Bakhritibba located in the Jaisalmer basin. These fields are located about 120 kilometres north-west of Jaisalmer town. The Dandewala Gas Processing Complex is situated approximately 35 kilometres from Tanot. Gas from wells at Dandewala and Bakhritibba fields is collected at this central processing facility.

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The processed natural gas is measured using a custody transfer meter before being sent to GAIL India Limited. From there, it is distributed to the final customer, Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL). The pipeline connecting the Dandewala Gas Processing Complex to RRVUNL covers 65 km.

The existing natural gas processing plant at Dandewala treats raw natural gas by removing formation water, heavy hydrocarbons and moisture to ensure the gas meets quality standards. OIL has signed a Gas Sale Agreement with GAIL India Limited for the sale and purchase of natural gas produced in Rajasthan. This agreement supports the supply chain from production to end users within the state.

Overall, the gas fields at Tanot, Dandewala and Bakhritibba, along with the Dandewala Gas Processing Complex, are key to OIL's operations in the Jaisalmer district, meeting energy needs in the region through established agreements and infrastructure.