ONGC targeting up to Rs 12,000 crore exploration capex for FY26-27; scouts global partners for deepwater push

State-run oil and gas giant ONGC is set to significantly escalate its exploration strategy, targeting an annual exploration capital expenditure (capex) of up to ₹12,000 crore for the fiscal year 2026-27. This planned outlay represents at least a 20% rise from its FY26 capex of ₹10,000 crore, sources familiar with the matter told Business Today.

The capital will be deployed in strategic tranches to widen the company’s footprint in deep and ultra-deepwater frontiers. With over 100 exploratory wells on the anvil across both the Eastern and Western shores, the move signals a decisive shift toward high-risk, high-reward offshore basins to bolster India’s domestic production and enhance energy security.

This comes amid heightened geopolitical tensions that have prompted crude-importing economies such as India to gradually reduce dependence on Russian oil and diversify supply sources. New and emerging partnerships with the UAE and Canada, along with the landmark India–EU Free Trade Agreement, underscore India’s growing focus on strengthening energy security. Against this backdrop, Indian oil marketing companies (OMCs) are expected to explore collaborations enabled by these FTAs to ramp up domestic production while broadening their crude import basket.

A 100-Well Roadmap

The ₹12,000 crore budget for FY27 will fund a massive drilling campaign. Of the 100+ wells planned, a significant portion will be dedicated to stratigraphic drilling in Category II and III basins, regions where commercial viability is yet to be proven. The company has set a crude oil production target of approximately 22 million tonnes for the current year, and the FY27 capex is viewed as critical to maintaining or slightly exceeding these levels in the coming years.

“As of now, we expect production to be slightly higher than last year. The fields remain largely the same, the challenges also remain similar,” Kumar added, underscoring that while the assets are aging, the application of new technology through global partnerships remains the most viable path forward. Since British Petroleum (BP) was mobilized as a TSP at Mumbai High in April 2025, the results have been tangible. Kumar noted that the collaboration has successfully stabilized production declines, adding approximately 3,500–4,000 barrels of oil per day and 2–2.5 MMSCMD of gas over the minimum baseline profile.

“Since BP mobilised in April, the production decline has been stabilised. Current production is already above the agreed baseline profile,” Kumar said, highlighting that the success at Mumbai High has paved the way for a much larger roll-out across the Western Offshore.

Global Outreach for Western Offshore

Building on this momentum, ONGC has floated a fresh global tender for its other Western Offshore oilfields, specifically excluding Mumbai High. This tender covers major producing clusters including Bassein, Heera, and Neelam. The deadline for these bids is set for March 16, 2026, with the goal of finalising partners by the end of the first quarter of FY27.

“We are now in the market for another TSP covering the Western Offshore, excluding the Mumbai High field,” Kumar briefed media on the sidelines of India Energy Week 2026. “The tender has been floated and we have personally communicated with the CEOs of 10 major E&P operators, including Shell, BP, Chevron, ExxonMobil, and TotalEnergies.”

Strategic Alliances on the Eastern Shore

While the Western Offshore strategy focuses on life-extension and 2, the Eastern shore is being geared for breakthrough exploration. ONGC is currently exploring technical E&P partnerships with ExxonMobil and BP to unlock the vast potential of the Andaman and Mahanadi basins.

"The company is in active talks with ExxonMobil regarding joint bids in the upcoming Open Acreage Licensing Policy (OALP) 10 round, but we are yet to hear back from Exxon," ONGCs Director for Exploration, OP Sinha said on the sidelines of India Energy Week 2026.