India’s ONGC plans to invest between $18 and $20 billion on new oil and gas drilling to strengthen the country’s energy security, the Economic Times has reported, citing unnamed sources.
The money will be used to hire drilling rigs for what is seen as the biggest drilling campaign ever, the report noted, adding that the tender for the rigs was announced last month. One of the sources, an industry executive, said ONGC was looking to contract drillships and submersible rigs for up to five years.
The Indian government has put concerted effort into boosting domestic oil and gas production to reduce the country’s overwhelming dependence on imported hydrocarbons, which for oil comes in at over 80%. For natural gas, import dependence is around 50% of consumption.
In August last year, Prime Minister Narendra Modi announced the launch of a national deepwater exploration campaign, saying “India will harness its deepwater energy resources, strengthening energy self-reliance and reducing dependence on foreign fuel imports.”
A month later, Oil India reported its first-ever gas discovery in the Andaman Sea—the first hydrocarbon discovery in the basin ever. The company said the size of the discovery was yet to be determined, but that it contained 87% methane. Rystad Energy said it could become a game-changer for India’s self-reliance in natural gas. “We believe eastern offshore of India hides untapped hydrocarbon potential and ONGC is on a mission to harness it,” ONGC said at the time.
The energy crunch that the U.S. and Israel war against Iran caused has served to make this push for self-reliance even more urgent for the world’s third-largest importer of crude, which relies on imports to meet some 85% of its demand. This makes India especially vulnerable to oil price swings and rallies, which was the reason the country quickly became a major destination for Russian oil that traded at a substantial discount because of Western sanctions.
By Charles Kennedy for Oilprice.com
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