India set for uptick in offshore exploration, gas production

India’s parliament has passed the Oilfields (Regulation and Development) Amendment Bill 2024, ushering in reforms to the country’s oil and gas laws with clauses supporting smaller operators and new entrants.

It follows the opening in February of the 191,986-sq-km OALP X bidding round, covering 13 offshore exploration blocks and a further 12 onshore, just six months after OALP IX.

According to Westwood Global Energy Group analyst Michela Francisco, over the next five years 1,100 wells should be drilled offshore India, of which 75% will be platform wells, with production set to be boosted by greenfield projects such as ONGC’s Cluster IX/X.

Westwood’s RigLogix service predicts that about 10 jackup rigs could be operating offshore India between 2025 and 2027, including the four re-tendered by ONGC in February.

Offshore exploration drilling over the next five years looks set to rise by 10%, with 45 well spuds expected annually.

This year ONGC and Oil India could spud up to five high-impact offshore wells. There is potential for further offshore exploration and appraisal drilling if the response to current bid rounds is positive, with the government likely to launch additional OALP rounds.

Based on the presumed drilling activity, Westwood sees India’s oil and gas production climbing to 1.6 MMboe/d by 2030, 20% more than the 1.4 MMboe/d produced last year.

By 2030, gas production should soar to 940,000 boe/d (6 Bcf/d), up 42% from last year’s average of 660,000 boe/d (4 Bcf/d). The additions will come mainly from shallow-water developments such as ONGC’s Daman Expansion & Daman Upside projects, and the company’s Integrated Gas Development project. These combined projects could add 152,000 boe/d by the end of 2029.

Further uplift should come from ONGC’s recent decision to name bp as its technical service provider, as it strives to raise output by 2028 at the Mumbai High field offshore western India by 44% and 89%, respectively, up from the 134,000 bbl/d of liquids produced in 2024.

However, Westwood's Francisco cautioned that the current bidding round may not have the impact the government is hoping for, based on the limited exploration successes in recent years and insufficient interest from E&P companies not already established in India.

That could cause the government to miss its target of raising the share of gas production in India’s energy mix from 6.83% in 2024 to 15% in 2030.