IEW2025: Oil India taps Brazil's Petrobras to expand offshore basin exploration

Oil India Ltd. has inked a deal with Brazil's Petrobras to collaborate on the exploration and production of hydrocarbon resources in India's offshore regions, as the state-run upstream producer looks to boost oil and gas output at home.

The agreement with Petrobras follows closely on the heels of Oil India finalizing a deal with TotalEnergies in November 2024, through which the global energy major will provide technical expertise to the state-run company for offshore exploration efforts.

"We are looking forward to an engaging collaboration between Petrobras and Oil India to explore deep and ultra-deep waters of Indian offshore basins," Oil India Chairman and Managing Director Ranjit Rath told S&P Global Commodity Insights after signing the agreement with Petrobras CEO Magda Chambriard on the sidelines of the India Energy Week.

"The strategic partnership marks a significant milestone in fostering bilateral energy cooperation between India and Brazil," Rath said.

Oil India's statement detailed the plans and said both companies plan to jointly explore opportunities in India's deep and ultra-deep offshore regions, including the Mahanadi, Andaman and other sedimentary basins.

The partnership aligns with the Indian government's policy initiatives, which aim to accelerate hydrocarbon exploration under the Hydrocarbon Exploration and Licensing Policy and the Open Acreage Licensing Policy.

Accelerating output

Oil India achieved a record production of 6.54 million mt of oil and oil equivalent during fiscal 2023-24 (April-March).

The company aims to double its exploration acreages in the coming years, with 50% of these acreages located in offshore regions, Rath said, adding that Oil India is looking to strengthen its position in the country's northeastern region, Rajasthan and Mahanadi while enhancing its presence on the east coast and Andaman and Nicobar basin.

Upstream output in India has been declining at an average annual rate of about 1% over the past 10 years due to a natural drop in mature fields of state-run upstream producers, a delay in monetizing existing discoveries and a reduced number of new discoveries, analysts at Commodity Insights said. They added that overseas interest in participating in exploration bidding rounds remains elusive.

India launched the 10th round of the Open Acreage Licensing Policy, or OALP X, on Feb. 11, coinciding with the IEW.

The OALP X represents the largest round in terms of acreage offered in a single OALP bid round. The 10th round offers 25 blocks with an area of 191,986 sq km and spans 13 sedimentary basins. Of the 25 blocks, six blocks are in shallow water, six are on land, one is in deep water and the remaining are in ultra-deep-water areas.

Under the OALP, upstream companies can carve out areas for oil and gas exploration. This program permits explorers to submit an expression of interest for any area at any time throughout the year. Subsequently, these earmarked areas are put up for auction.