India's ONGC sees modest output growth; Western Offshore to drive gains in FY 2027-28

India's leading state-run explorer Oil and Natural Gas Corp. expects its stand-alone output of oil and oil-equivalent gas to reach about 39 million metric tons in fiscal year 2026-27 (April-March), up 0.4% year over year, company officials said Aug. 5.

Output is expected to rise further to about 40 million mt in FY 2027-28, driven primarily by incremental production from ongoing developments at its western offshore project, they added during an investors' call.

The anticipated increase in output aligns with ONGC's broader mandate to ramp up oil and gas production as India steps up efforts to reduce its heavy reliance on crude imports, which currently account for more than 85% of domestic demand. The government is also pushing to sharply lower dependency on imported gas, reinforcing the strategic importance of ONGC's upstream operations, company officials said.

ONGC said in a statement that its crude oil output fell 4.9% year over year to 4.45 million mt in the first quarter of FY 2026-27. Gas output in the same quarter totaled 4.76 billion cubic meters, down 1.9% year over year.

Despite the declines in volumes, ONGC reported robust pricing for its output, with its crude oil realized at $99.45/barrel in the first quarter, up 50.4% year over year. The company largely attributed the price surge to firmer global crude prices, following heightened geopolitical tensions in the Middle East.

For gas output from old fields, ONGC realized $7/million British thermal units, up 5.4% year over year. Meanwhile, gas from new fields fetched $13.31/MMBtu, up 61.5% year over year, reflecting the company's progress in developing higher-value assets.

In FY 2025-26, ONGC recorded crude oil output of 18.35 million mt, down 1.1% year over year, while gas output fell 0.6% year over year to 19.53 Bcm, underscoring persistent challenges in maintaining production levels amid natural field declines and operational complexities, company officials said.

Efforts to reverse trends

Company officials said ONGC remained focused on reversing these trends through aggressive exploration and development initiatives.

ONGC's ultra-deepwater exploratory drilling campaign is progressing at full pace in the Andaman Offshore region, signaling the company's commitment to unlocking new reserves and bolstering domestic production. At the same time, seismic data acquisition is underway in deepwater areas off both India's east and west coasts, laying the groundwork for future exploration and development activities.

ONGC and BP signed a contract on June 25 under which BP will provide technical services to the Indian state-run upstream producer. The collaboration aims to boost oil and gas output from ONGC's Western Offshore Basin fields, building on encouraging results at Mumbai High.

The joint statement from the two companies emphasized the expansion of their partnership, which is expected to enhance operational efficiencies and accelerate production growth in key offshore assets.

India's upstream push is also gaining momentum in other regions. The country recently began drilling its first appraisal well in the Mahanadi Offshore Basin, marking a milestone in the expansion of deepwater exploration.

The MN-DWN18-1-HD appraisal well — operated by ONGC — is the first of four planned deepwater wells that will systematically evaluate one of India's most prospective offshore basins, according to a petroleum ministry statement July 25. The initiative holds the potential to unlock new oil and gas reserves, further supporting India's energy security ambitions.