Oil & Natural Gas Corporation Ltd (ONGC), which contributes around 70% of India's crude oil and approximately 84% of its natural gas production, is on an aggressive expansion drive to reinvent itself and remain a key contributor to India’s energy security.

Last week, ONGC entered into a series of major deals in this direction. On February 12, NGC NTPC Green Private Limited (ONGPL), a 50:50 joint venture between ONGC Green Limited (OGL) and NTPC Green Energy Limited (NGEL), acquired Ayana Renewable Power for ₹19,500 crore (USD 2.3 billion) in one of the largest recent deals in India's energy sector.

On the same day, ONGC Videsh Ltd., a wholly owned subsidiary of ONGC, teamed up with energy major Petróleo Brasileiro S.A. (Petrobras) to assess opportunities in upstream, marketing, decarbonisation, and low-carbon solutions, among other areas.

A day later, ONGC and bp, one of the largest international energy companies, signed a contract under which bp will serve as the Technical Services Provider (TSP) for the Mumbai High field, India’s largest and most prolific offshore oil field. Additionally, ONGC partnered with Tata Power Renewable Energy Limited (TPREL), a subsidiary of The Tata Power Company Limited, to explore collaborative opportunities in the Battery Energy Storage System (BESS) value chain.

On February 15, the State Oil Company of the Azerbaijan Republic (SOCAR), ONGC, and its subsidiary Mangalore Refinery and Petrochemicals Limited (MRPL) signed a non-binding Memorandum of Understanding (MoU) to explore strategic opportunities in the energy sector. The MoU outlines collaboration in the supply of crude oil and liquefied natural gas (LNG), the sale and supply of petroleum products, exploration of trading opportunities, and capacity building through knowledge exchange.

Green Energy Push

ONGC, predominantly a fossil fuel operator, is now aiming for a greener future. As of FY24, it had only 193 MW (megawatts) of green energy—153 MW from wind and 40 MW from solar. With an investment of ₹1 lakh crore, ONGC plans to reach 10 GW, with 60-70% from solar and 30-40% from wind. Other green initiatives include 25 biogas plants, 2 GW of pumped hydro, 1 MMTPA (million metric tonnes per annum) of green ammonia, and 180 kilotonnes of green hydrogen. In FY25, the plan was to add only 1 GW of assets with an investment of ₹1,000 crore, but the task was expedited with the Ayana acquisition. ONGC aims to achieve net zero by 2038.

Acquired from the National Investment and Infrastructure Fund (NIIF), British International Investment Plc (BII) and its subsidiaries, and Eversource Capital, Ayana has approximately 4.1 GW of operational and under-construction assets. This acquisition marks ONGPL’s first strategic investment since its inception in November 2024.

“The acquisition of Ayana Renewables is a strategic decision by ONGC Green Ltd and NTPC Green Energy Ltd to accelerate the momentum toward a clean energy revolution. It marks a historic milestone in our journey toward a sustainable energy future,” said Sanjay Mazumdar, CEO of ONGC Green Limited.

Rising Demand, Stagnating Wells

ONGC, which discovered 8 out of India's 9 producing basins—including the latest Vindhya basin—has struggled to improve production in recent years despite increased exploration and production (E&P) spending. Its crude oil production remained stagnant in FY23 and FY24, at 18.449 MMT and 18.14 MMT, respectively. The standalone crude oil production (excluding condensate) during Q3 FY25 was 4.653 MMT, registering a growth of 2.2% over the corresponding quarter of FY24. Similarly, standalone crude oil production during the first nine months of FY25 was 13.858 MMT, reflecting a 1.2% increase over the same period in FY24.

Gas production also remained stagnant at 19.969 billion cubic meters (BCM) and 19.316 BCM, respectively. Standalone natural gas production during Q3 FY25 was 4.978 BCM, registering a growth of 0.3% over Q3 FY24.

While ONGC faces production challenges, India’s crude oil demand continues to rise. In FY24, India imported 232.5 MMT of crude oil, nearly the same as the 232.7 MMT imported the previous year. As the world’s third-largest consumer of crude oil, India has an import dependency of over 85%. According to research agency IBEF, crude oil consumption is expected to grow at a CAGR of 4.59% to 500 MMT by FY40. Similarly, India’s natural gas consumption is projected to increase by nearly 60% to 103 BCM annually, requiring gas imports to double by 2030, according to the International Energy Agency (IEA).

In its deal with bp, ONGC will retain ownership and operational control of the Bombay High field. Under the terms of the contract, bp will receive a fixed fee for two years for its deployed personnel, followed by a service fee linked to incremental oil and gas production. bp will work with ONGC to stabilise the field’s current production decline and restore it to a growth trajectory.

Focus on More E&P

With depleting oil and gas fields and rising demand, ONGC plans to spend ₹36,920 crore in FY26, focusing on exploration, drilling, capital, and integration projects. It aims to double its domestic exploration and production acreage to 500,000 square kilometres over the next five years.

With the government opening up about 1 million sq km of no-go areas for E&P, ONGC plans to invest an additional ₹10,000 crore annually over the next five years in search of new gas reserves. In the past year, ONGC acquired 32,000 sq km of acreage for E&P, bringing its total to approximately 180,000 sq km. Once the ninth round of the Open Acreage Licensing Policy (OALP) is completed, ONGC’s total acreage may increase to around 250,000 sq km, according to officials.

In 2022, ONGC decided to allocate 150% more funds to explore new oil and gas reserves. The company is one of India's leading oil drilling operators, with drilling services accounting for more than 55% of its capital expenditure. ONGC operates approximately 105 drilling rigs and 74 workover rigs and is among the few companies globally to have drilled 127 deepwater wells.

With new partners like bp and Petrobras joining forces, ONGC may be poised to kickstart a new growth strategy in the coming years.