India is seeking deeper collaboration with international energy companies and aims to attract greater foreign direct investment across its oil and gas sector as it advances policy reforms to make the industry more investor-friendly, Petroleum Secretary Neeraj Mittal said Nov. 3.

Speaking at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), Mittal said India is seeking partnerships across the upstream, midstream and downstream segments and aims to establish itself as a global manufacturing base for the oil and gas industry.

“We are here to collaborate and forge linkages with multinational companies, invite them to India and make India the destination for global manufacturing for the oil and gas sector. We hope that we will be able to attract a significant amount of foreign direct investment into the space,” Mittal, who is attending the conference, said in a video message.

Indian delegates attending ADIPEC said New Delhi is courting foreign investors amid policy reforms aimed at expanding domestic exploration, strengthening energy infrastructure and encouraging greater private and foreign investment in the sector.

Mittal said Samudra Manthan, the program focused on deep-water and ultra-deepwater exploration, was designed to expand exploration in technically challenging offshore areas while reducing the financial risks associated with high-cost drilling.

“This is a very unique program because India is offering almost 50% government support to de-risk deep-water drilling costs,” Mittal said.

The federal Cabinet approved investments of up to 840 billion Indian rupees ($8.8 billion) over five years in late July to advance offshore oil and gas exploration under the National Offshore Exploration Scheme. The initiative is expected to help add more than 600 million metric tons of oil equivalent to India’s reserves by fiscal year 2030-31 (April-March), the Petroleum Ministry said July 31.

The government will fund up to 50% of eligible deep-water exploration drilling costs, capped at $71 million per well. By partially covering these costs, the scheme could significantly improve the economics of frontier exploration.

Downstream growth

There are also investment opportunities in refining, petrochemicals and downstream manufacturing, as India’s demand for petroleum products is expected to grow for at least the next two decades, Vikas Kaushal, chairman and managing director of state-owned Hindustan Petroleum Corp. Ltd., said at the conference.

“In India, we do have a fantastic refining base,” Kaushal said, adding that the country already exports significant volumes of refined products and has developed strong operational capabilities through sustained investment in new refineries.

India’s refining capacity, currently about 267 million metric tons/year, is expected to approach 290 million mt/y within the next year and reach 320 million mt/y by 2032, Petroleum Minister Hardeep Singh Puri said Sept. 25. The expansion will involve both new refineries and upgrades to existing facilities.

According to S&P Global Energy CERA, India’s refining capacity will reach 5.85 million barrels/day at the end of 2027, up 600,000 b/d from 2025. Capacity expansions at Indian Oil Corp. Ltd.’s facilities in Panipat, Koyali and Barauni are expected to be the main contributors, adding 346,000 b/d to the country’s capacity.

Kaushal said India’s refining capacity and position as a major fuel market could provide a platform for further investment in downstream products, including petrochemicals.

He added that India’s petrochemical consumption remained relatively low compared with global levels, while the country imports about 9 million-10 million mt/y of petrochemicals.

Kaushal said HPCL intends to build on both its oil-related activities and downstream businesses while expanding its petrochemical investments. “That’s something where I would want to invest in the next five to 10 years,” he said.

Alongside efforts to increase oil and gas production, India is also presenting its energy transition as an area for international cooperation, delegates said at ADIPEC.

Mittal and other Indian energy industry leaders attending the conference said India’s energy program is part of its broader effort to develop alternative fuels while addressing waste management and energy security. It also creates opportunities for foreign companies in technology, project development, equipment manufacturing and infrastructure.

Source: Platts