CMD Sets the Bar: Oil India to Grow 250% in 6 Years, Eyes Beyond Traditional Strongholds

9 Jan 2024 , 12:12 PM

With the help of its intended triple of refining capacity and extension of exploration activity across the nation, Oil India Ltd. hopes to increase its annual revenues by two and a half times to Rs. 1 lakh crore by 2030, according to its chairman, Ranjit Rath.

‘We intend to become a nationwide organisation,’ Rath stated in an interview with ET. He indicated that while the corporation will still focus on the Northeast, it would be much busier than in the past, with more exploration taking place in many other regions of the nation, including as Rajasthan, Odisha, Andhra Pradesh, and the Andaman Islands.

After acquiring Numaligarh Refinery (NRL) three years ago as part of the restructuring of Bharat Petroleum Corp (BPCL), another state-run refiner, Oil India has already entered the refining industry. The company now wants to go even farther into biogas, ethanol, petrochemicals, and renewable energy, according to Rath, a geoscientist by training who became Oil India’s chairman in 2022. He oversaw Mineral Exploration & Consultancy Limited, a state-run company, prior to joining Oil India.

Rath stated, ‘We are literally restructuring Oil India,’ and that this is creating new chances for the staff. According to him, personnel are receiving extensive training in order to acquire the new capabilities needed for planned expansion into new business areas.

While over twenty officers are receiving training at another site for offshore capabilities, almost seven hundred personnel are receiving drilling training at ONGC facilities.

Rath stated that Oil India is aggressively collaborating with foreign consultants and service providers in order to develop ‘in-house competencies’ and making sure that its engineers and geologists are assigned to foreign project sites.

In addition, certain NRL staff are scheduled to receive training on managing oil imports from outside markets, and executives at Oil India will possess expertise in natural gas trading. In order to increase its capacity to 9 mtpa by 2025, NRL will have to significantly access the global oil market.

Oil India’s income forecast for 2030 is contingent upon the performance of its exploration industry and the level of oil and gas prices. The last three years have seen extremely volatile pricing for both petrol and oil on a global scale. According to Rath, although there will be fluctuations, oil prices in 2024 will primarily remain between $70-80 per barrel.

‘If there is a sustained price spike, then there is a fear of a demand drop,’ he stated. He continued by saying that ‘a drop in price also curtails investments in exploration and production,’ contending that stable prices are beneficial to both buyers and sellers.

According to Rath, one of the main immediate problems Oil India is facing is a rig shortage. To make up the difference, the business is also attempting to buy new rigs or renovate existing ones, but that will take time. The company intends to drill 60–70 wells annually for three years. Unlike in the past, it must dig deeper wells and use more advanced rigs, which are difficult to come by.

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