State-run Oil India Limited (OIL) is targeting crude oil production of 4 million metric tonnes (MMT) for 2025-26, higher than the current financial year’s production target of 3.5 MMT, the company’s chairman and managing director Ranjit Rath told Moneycontrol in an interview.
OIL will drill over 70 wells in the coming fiscal, the highest ever in a year for the company, Rath said.
“This year, we will touch (crude oil production of) 3.5 MMT, the way it looks like. We have done a lot of interventions in terms of enhancing our production. What we have done primarily is create a balance between our enhanced drilling efforts, both in terms of exploration, rank exploration, near-field exploration and development wells. In the development wells, we have gained a certain quantum of oil production. We have reported 4 to 5 percent growth, on top of a decline of 10 percent, because we are handling mature fields,” said Rath.
“Going forward, we have an ambitious target of about 4 million metric tonnes of crude oil production. Last year (FY24), we drilled 61 wells. This year (FY25), we are aspiring to touch 60-plus wells. And going forward, we are now targeting drilling 70 plus wells (in FY26)," he added.
In the first nine months of FY25, the company achieved crude oil production of 2.6 MMT. According to oil ministry data, OIL’s crude oil production stood at 3.3 MMT in FY24, compared to 3.2 MMT and 3.0 MMT in FY23 and FY22, respectively.
Apart from drilling a record number of wells, the state-run oil exploration company plans to invest in already-producing wells to meet India’s rising energy demand. Rath said OIL is implementing advanced techniques such as hydraulic fracturing—a drilling technique to extract oil from deeper levels— and extended reach drilling to arrest the production decline from its mature fields.
“We are enhancing our (production) efforts by undertaking hydrofrac, by adopting plunger lift. We are also now working on to take up extended reach drilling (a drilling technique which involves drilling long horizontal wells) so that areas which were inaccessible earlier will be accessible to extract oil... That is the plan in terms of crude oil and natural gas,” the CMD said.
“We are also initiating deployment of deep drilling using 3,000 horsepower rigs, and adopting new technology called multilateral well drilling, where with a single well plate, we can drill three wells horizontally,” he added.
India’s upstream companies including OIL and Oil and Natural Gas Corporation of India have struggled in recent years to boost oil and gas production. The country has of late been facing the double whammy of a natural decline in its mature fields and the inability to land a new discovery.
In FY24, India’s crude oil production came in at 27.2 MMT, falling short of the 30 MMT target and lower than the previous year’s production of 27.8 MMT.
India is dependent on imports for over 85 percent of its crude oil requirements and around 50 percent of its natural gas needs.
Rath said OIL is also working on building storage facilities for natural gas to avoid gas flaring. Meanwhile, the company is also looking at crude pipeline integrations within its fields to evacuate natural gas.
To enhance its production capability, OIL plans to increase capital expenditure by over 10 percent at Rs 7,500 crore on a standalone basis for 2025-26.
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