Oil India has committed ₹15,000 crore to expand deepwater and ultra-deepwater exploration over the next three years under the government's 'Samudra Manthan' programme. The company is pivoting towards frontier basins like the Andaman Sea to boost production. Investors should track the execution of these capital-intensive projects and the ongoing challenge of repatriating $300 million in dividends stuck in Russian assets.
Oil India Limited has announced a fresh capital investment of ₹15,000 crore to be deployed over the next three years, focusing on deepwater and ultra-deepwater exploration. This initiative aligns with the Union government's 'Samudra Manthan' programme, an ambitious effort to scale up domestic oil and gas production through intensive surveying and drilling in frontier regions.
Traditionally known for its strong onshore presence in Northeast India, Oil India is actively shifting toward offshore assets. The company has already acquired 48,000 square kilometres of acreage across key regions, including the Krishna-Godavari, Mahanadi, Andaman, and Kerala-Konkan basins. Technical work is currently in progress, with seismic data processing and reprocessing underway to pinpoint optimal drilling sites for future development.
Operational progress is visible in the Andaman Basin, where the company has reported promising signs. Management noted that the Sri Vijayapuram-2 and Sri Vijayapuram-3 wells have confirmed the presence of natural gas, suggesting a viable petroleum system in the area. These discoveries, if scaled successfully, could be vital for replacing depleting onshore reserves.
While the expansion plans are aggressive, the company faces external challenges. Approximately $300 million in dividends from Russian oil investments remains held in the Moscow branch of State Bank of India. These funds are effectively trapped due to international Western sanctions. While management has indicated they are working toward a resolution, there is no fixed timeline for when these funds might be accessible, impacting the company's immediate cash liquidity from those specific foreign assets.
In terms of recent operational performance, the company reported a production of 3.450 million metric tonnes of crude oil and 3.186 billion cubic metres of natural gas in FY26, supported by the drilling of 74 wells. Alongside its core hydrocarbon business, the company is diversifying into clean energy through its subsidiary, Oil Green Energy Limited, which targets waste-to-energy and renewable projects.
Moving forward, the primary monitorables for investors include the pace and execution of these offshore exploration projects, as deepwater drilling involves high technical complexity and costs. Additionally, shareholders may watch for updates on the recovery of the Russian dividends, as any progress there could provide a boost to cash flow. The company’s ability to balance this large capital expenditure with financial returns while managing potential project delays in frontier basins will remain key to understanding its long-term financial health.