Output from overseas oil and gas fields owned by Public Sector Undertakings (PSUs) in India saw a slight increase during the financial year 2023-24. This marks a modest improvement following a four-year trend of declining production, underscoring the ongoing difficulties that Indian companies face in enhancing their international oil and gas production capabilities.
The production total reached 19.9 million metric tons of oil equivalent (MMTOE) for the year 2023-24, a minor rise from the previous year’s 19.5 MMTOE. However, the figures are still well below the high reached in 2018-19. The ongoing stagnation is largely due to the aging of current production fields and a reduction in new international acquisitions.
A notable, albeit temporary, boost in production came from the Sakhalin-1 project in Russia, where ONGC Videsh is a stakeholder. The project had previously seen disruptions due to the conflict between Russia and Ukraine in 2022. Additionally, operations at ONGC Videsh’s ventures in South Sudan restarted after being halted by severe flooding.
These individual successes have been tempered by broader geopolitical factors. Production cuts mandated by OPEC+, which includes major oil producers like Saudi Arabia and Russia, have affected the output of Indian companies with holdings in these countries, including Russia, UAE, Azerbaijan, and South Sudan.
These nations are significant contributors to India’s international oil and gas output, and restrictions on their production limit potential improvements for Indian PSUs. Strategic decisions from the past decade have also influenced current outcomes.
Notably, substantial investments in Russian oil fields around 2015-16 led to a significant boost in production, but this growth was not maintained. Recent years have seen a slowdown in acquisitions, creating a shortage of new exploration and development initiatives. Furthermore, security issues have stalled projects in locations such as the large gas field in Mozambique.
Indian PSUs are confronted with the challenge of increasing their international oil and gas production. Although the resumption of normal operations at sites like Sakhalin-1 is encouraging, sustained growth will depend on acquiring new assets and effectively navigating the complexities of the international oil market.
As reported by URBAN ACRES, exploring opportunities outside of OPEC+ nations and accelerating the development of projects that have been delayed could be key factors in shaping the future direction of India’s international oil and gas efforts.
