INTERVIEW: Oil India's Numaligarh expansion on track; in agreement with BPCL for imported crude

State-run Oil India Ltd. has finalized a collaborative agreement with Bharat Petroleum Corp. Ltd., under which BPCL will annually import up to 6 million mt of crude oil for Oil India's Numaligarh Refinery Ltd., or NRL, following the completion of its expansion by the end of 2025, Oil India Chairman and Managing Director Ranjit Rath said May 30.

Rath said NRL's expansion schedule, which will see its integrated capacity rise from 3 million mt/year to 9 million mt/year, is on schedule. The new capacity will be commissioned in December 2025.

"But the stabilization process of the incremental capacity of NRL will take another six months. Therefore, we will need the imported crude volumes only next year," Rath told Platts, part of S&P Global Commodity Insights.

NRL currently uses mainly domestic crude as feedstock, with a capacity utilization of more than 100%. The NRL expansion road map also includes setting up a crude oil import terminal at the Paradip port and laying about 1,640 km of pipelines to transport imported crude oil.

NRLis also looking to set up a 185 kiloliter/d ethanol plant at Numaligarh through its joint venture, Assam Bio Refinery Pvt. Ltd. This biorefinery will use locally grown bamboo as feedstock. "This plant is also in the advanced state of precommissioning, and this will make a huge difference to the rural economy around the region," Rath said.

Record oil, gas output

Oil India posted a record oil and gas output of 6.71 million mt of oil equivalent in the 2024-25 financial year (April-March), up 2.6% from a year earlier. Crude production rose 2.9% year over year to 3.46 million mt, while gas production increased 2.2% from a year ago to 3.25 Bcm.

"This financial year, we are expecting a combined oil and gas production growth of about 6%, and that is even after taking into account a decline in output of 8%-10% from the mature fields that we operate," Rath said.

Oil India is aiming to double its exploration acreage in the coming years and is seeking partnerships to realize the hydrocarbon potential of offshore regions in Indian sedimentary basins. It has earmarked a huge expenditure budget to push upstream projects following a series of policy reforms, such as the Open Acreage Licensing Policy, or OALP, National Seismic Program for sedimentary basins, Discovered Small Fields Policy and Enhanced Recovery Policy.

Oil India has expanded its domestic acreage from about 9,300 sq km in 2017-18 to the present acreage of about 60,000 sq km, spread across the Assam Shelf, the Assam Arakan fold belt, the Rajasthan basin, the Mahanadi basin, offshore areas in the Andaman and Nicobar basin, the Kerala Konkan basin and the KG basin.

International collaboration

Earlier in 2025, Oil India 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 aims to boost oil and gas output at home.

The agreement with Petrobras closely follows Oil India's finalization of a deal with TotalEnergies in November 2024, in which the global energy major will offer the Indian company technical expertise for offshore exploration efforts.

"We are seeking collaboration from international oil companies and overseas national companies for partnering with us in deepwater and ultra-deepwater exploration efforts in the ongoing OALP bidding rounds," Rath said.

Under the ninth round of OALP, ONGC was awarded 11 blocks, while Vedanta, which owns Cairn Oil and Gas, secured seven blocks, and Oil India won six blocks. A consortium of ONGC and Oil India won three blocks, while another consortium of ONGC, Reliance and BP obtained one block in the round.

Rath said that the 10th round of the OALP -- unveiled earlier this year -- and the proposed changes to the Oil Fields (Regulation Development) Act of 1948 will help accelerate upstream growth.

According to analysts at S&P Global Commodity Insights, upstream output in India has been declining at an average annual rate of 1.1% over the past 10 years due to a natural drop in mature fields of state-run producers, delays in monetizing existing discoveries and a limited number of new discoveries.

This week, Oil India was also declared the preferred bidder for the license grant for the Jorkian-Satipura-Khunja amalgamated potash and halite block in the Hanumangarh district of Rajasthan. Rath said this would be a first major step toward unlocking domestic potash resources.

"Our diversification mission is aligned toward national priorities, and it is as per the national critical minerals mission. This diversification represents a well-timed response to support India's self-reliance goals," he said.

Oil India expects to achieve 5%-7% of non-fossil energy in its portfolio by 2030, which would further ramp up to 12%-15% by 2040, Rath said.