India Speeds Up Offshore Drilling As Oil Supply Risks Intensify

India is accelerating its push to secure energy supplies as global oil markets remain volatile. The country imports nearly 80% to 90% of its crude, and recent spikes, with Brent crude briefly approaching $150 a barrel, have added pressure on both inflation and the rupee.

In response, a $20 billion offshore drilling effort is now being advanced, which signals a shift towards producing more oil and gas domestically.

What Has Prompted This Sudden Shift?

The prompt for this sudden shift in focus appears to be the latest round of tensions in the Middle East, particularly in the Strait of Hormuz, which is an important passage for crude oil shipments.

The International Energy Agency has already issued a warning that this particular issue is significant in terms of scale. The agency’s director, Fatih Birol, has pointed out that the global economy could be in for significant strain if this issue continues.

For India, it is already manifesting itself in several areas. For instance, the import bill for crude continues to increase due to the higher price of crude, and a weakening rupee compounds the problem.

Why Is ONGC Fast-Tracking Offshore Drilling?

To address these constraints, Oil and Natural Gas Corporation (ONGC) has issued a tender to hire deep-water rigs from all over the world. The $20-billion tender includes both drillships and semi-submersible rigs, which could be hired for up to five years.

The pace of execution stands out. Companies have been asked to deploy rigs within about 80 days, pointing to how quickly authorities want to move. This falls under the Samudra Manthan Mission, announced by Narendra Modi, which focuses on exploring offshore reserves.

Work will expand in the Krishna-Godavari basin while also moving into relatively untapped areas like the Andaman and Nicobar basin. These regions are believed to hold potential, though extraction comes with higher costs and technical challenges.

To handle this, ONGC is looking to partner with global companies such as BP, ExxonMobil, TotalEnergies, and Petrobras, combining local investment with international expertise.

At 10:08 AM on Monday, 30 March, ONGC shares were marginally up 1.49%.

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Can This Strategy Reduce Import Risks?

India already has some foundation in place. Offshore production contributes a meaningful share of its gas output, and more than 170 hydrocarbon discoveries have been recorded so far.

However, deepwater exploration is a long process. It often takes years before production reaches meaningful levels, which means imports will continue to dominate in the near term.

The larger objective is to lower exposure to global disruptions. Higher domestic output could help India manage price shocks better and strengthen its position in global energy negotiations.

At the same time, concerns remain. Deep-sea drilling brings environmental risks, including possible damage to marine ecosystems and spill hazards. These factors are likely to stay in focus as the project moves ahead.

For now, India appears willing to take that risk. The shift suggests a stronger focus on building energy security at home, even if the results take time to materialise.

Sources

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