Oil and Natural Gas Corporation (ONGC) has issued an Expression of Interest to acquire deepwater drillships or enter joint ventures, moving away from its reliance on rented rigs. This strategy supports the Rs 84,084 crore Mission Samudra Manthan, which targets 150 deepwater wells over seven years. Investors may monitor how this shift to asset ownership impacts long-term capital spending and operational control.
Oil and Natural Gas Corporation (ONGC) is changing its strategy for offshore exploration by seeking to own or co-own its deepwater drillships. The company has invited global consultants to assist in acquiring these specialized vessels or forming joint ventures. This move marks a departure from its historical practice of relying on third-party time-charters, where the company rents rigs from international operators. By securing its own fleet, the energy major aims to gain better control over its exploration schedule and shield itself from the volatile costs associated with renting equipment in the global market.
This initiative is directly tied to the Mission Samudra Manthan program, a government-backed scheme launched in July 2026. With an total outlay of Rs 84,084 crore through 2031, the mission is designed to accelerate India's offshore production. The goal is to drill 150 deepwater exploration wells over the next seven years, aiming to tap into a potential 5,600 million metric tonnes of oil equivalent. Since India does not currently manufacture the specialized ships needed to operate at depths greater than 1,500 meters, ONGC plans to use international partnerships to bridge this technology and hardware gap.
The company recently reported strong financial performance, with a standalone profit of Rs 17,034 crore in the first quarter of the 2027 fiscal year, reflecting a 112% increase compared to the previous year. While this profit provides a buffer for significant capital spending, the move into asset ownership requires substantial investment and brings a different set of risks. Unlike leasing equipment, where costs are variable, owning and maintaining complex deepwater vessels will demand long-term financial commitments.
Investors should be aware of the inherent risks in this capital-intensive sector. Deepwater drilling is technically difficult and expensive. There is no guarantee that drilling will result in commercially viable discoveries, and unsuccessful wells can lead to financial losses known as write-offs. Additionally, the company faces operational risks in managing these complex, global assets. The success of this strategy will depend on the company's ability to integrate these new vessels without significantly straining its balance sheet or facing execution delays.
The next steps for investors will be to monitor the timeline of the consultancy appointment and the specific structure of any joint venture. The progress of the Mission Samudra Manthan, including the actual speed of well-drilling and the success rate of these explorations, will be key factors in determining whether this shift to ownership delivers the intended efficiency and production growth.