MC Interview | Oil India plans to drill 33% more wells in FY25 to boost production: CMD

OIL will drill around 60 wells in all its assets in FY25.

State-run oil explorer Oil India Limited (OIL) plans to expedite exploration activities in its blocks and drill more wells in the financial year 2024-25 (FY25), Chairman and Managing Director (CMD) Ranjit Rath told Moneycontrol.

OIL will drill around 60 wells in all its assets in FY25, compared to 45 wells drilled in the current year, said Rath.

To finance the increased exploration activities, the oil and gas explorer has planned capital expenditure of Rs 14,000 crore to Rs 15,000 crore for FY25.

Edited excerpts:

For FY25, what are the company’s plans for exploration? Where is the company planning to drill wells?

Oil India has impeccable credentials in terms of our production effort through sustained reservoir management because we not only operate the oldest oil and gas fields but also operate in one of the most prolific hydrocarbon basins in the country and a very mature field. So, while our effort is on enhancing production, despite the decline curve of the mature field, we have been able to have a sustained growth year at about 5.5 percent. We are expecting an upward trend in the coming year as well.

We are creating an inventory of locations to be drilled. Today, we have about 60,000 square kilometres of exploration acreage available with us, of which over 10,000 acreage is offshore. In FY23, we had drilled 38 wells, and last year we had drilled about 45 wells. This year (FY25) we are aspiring to drill about 60 wells, and going forward, it will be 75 wells.

The 60 wells (for FY25) would be both exploration wells and development wells. We are planning to drill wells in almost all of our assets. Re-processing of data, creating an inventory of drilling well locations, and having a succession or a line of drilling rigs available to us so that the rig count is maintained in a sustained manner to pursue the exploration efforts — that's our plan for next year.

What is the capex planned for FY25?

It would be more than the current (financial) year, which would be around Rs 12,000 crore to Rs 13,000 crore. For the next year, we are planning around Rs 14,000 crore to Rs 15,000 crore. Exploration capex will be about 50 percent, i.e. Rs 7,500 crore, and the rest will be for NRL refinery and other activities.

What is the status of the setting up of CBG plants?

We are planning around 25 CBG plants pan India. Discussion is ongoing with the respective state governments and municipal corporations. In some cases, we have already signed initial non-binding MoUs for identifying land. They have got consultants and DPRs are being made. Assurances of segregated or not-so-segregated municipal solid waste are being taken from municipal corporations.

MoUs (for CBG plants) will be in place very soon. After that, we'll have the DPRs, and then we will go to the market for EPC. In two years, production from the plants will start.

What are the other plans for OIL’s energy transition?

We plan to spend Rs 25,000 crore overall on energy transition. This includes bio-ethanol initiatives; we have one plant and are looking at one more. We are looking at CO2 EOR, the zero gas flaring initiative, additional pipeline for evacuation of natural gas, and carbon sequestration possibilities.

What are OIL’s expansion plans for the Numaligarh refinery?

The expansion plan is on track. We are looking at September 2025, both for the refinery expansion and pipeline expansion. We will work on a 1,640-km-long pipeline from Paradeep to Numaligarh and refining expansion from three to nine MMTPA.

Would drilling activities restart in Libya?

For overseas assets, we are invested along with the operators. It is the operators who carry out all these activities. We are seeing traction in discussions, but it is the operators who would offer comments on the future plans.

Are you looking at any overseas assets?

We are open to the idea; we are talking and reaching out to IOCs (international oil companies) or NOCs (national oil companies) of the world to come to India as a destination for exploration. We are also looking at overseas assets such as oil equity abroad, and discussions are ongoing on various fronts, but there is nothing concrete right now.

Are you planning a subsidiary in GIFT City in Gujarat?

We are contemplating, but nothing serious has taken place right now.

Do you expect the windfall tax to be removed?

These are the initiatives of the Government of India to meet its requirements, and as a national oil company that operates nominated fields, this is another excise duty for us.