"If Legacy Oil Companies Want to Survive Beyond 30-40 Years, They Must Adapt": ONGC’s Arun Kumar Singh on India’s Energy Future

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As the world transitions towards a more sustainable energy mix, legacy oil and gas companies are facing a big question—how do they stay relevant in a rapidly changing landscape? Arun Kumar Singh, Chairman and CEO of Oil and Natural Gas Corporation (ONGC), believes the answer lies in diversification, technological advancements, and reducing the time required to bring new oil and gas discoveries into production.

In a conversation with The Core, Singh explains why discovering, drilling, and producing oil takes a decade, what India is doing to cut that timeline, and how ONGC is adapting to new energy sources to stay ahead in the global energy game. He also weighs in on India’s oil dependency, the geopolitical risks affecting energy security, and why India must aggressively expand its exploration footprint.

Q) Govindraj Ethiraj: Mr Singh, thank you for joining me. You have spoken about the challenges and complexities of oil exploration—how the process of discovering, drilling and extracting oil can take up to ten years. One of India’s biggest challenges in bridging the energy gap is reducing this timeline. Why does it take so long, and what advancements in the oil and gas sector are helping to accelerate this process?

Arun Kumar Singh: Thank you for asking this question. In fact, this ten years is contextual. If you are dealing with deep-water offshore exploration, then from the start of exploration to bringing oil or gas to the surface, it can indeed take around ten years.

For onshore exploration, particularly if you discover something, it could be as short as from day one to a maximum of three years. But globally, if you look at the last decade or so, most new discoveries have been in deep or ultra-deep water. Take Guyana, for example—Exxon explored there for many years, and now it is almost going to reach one million barrels a day of production.

Why is it so lengthy for deep and ultra-deep water? Because you begin by taking a licence, then conduct seismic surveys, process and interpret the large volume of data, and only then choose a location to drill. Planning the drilling, contracting an ultra-deep-water vessel, drilling and finally discovering oil typically takes around four years. After making a discovery, you need to appraise how much oil is there and whether it is economically viable, which can take another year or so. Then, if you have oil, you need to arrange a production storage and offloading (PSO) system and subsea equipment; I do not think anyone has done that in under four years. If you have gas, and you are not close to shore, you must convert it into LNG to ship it, adding more complexity.

Looking at the last four years, the big production numbers—whether from Brazil or Guyana—have all come from ultra-deep water. In India, we have about 3.36 million square kilometres of sedimentary basins, of which 1.2 million square kilometres were never explored until recently. The government has now released those blocks, and we expect a lot from them, but most of that potential is likely in deep or ultra-deep waters.

That is why I said the timeline can be compressed if we, for example, contract a vessel on a national basis for everyone exploring in deep water over the next five years. This would save considerable time, including for data processing and interpretation. If we believe that large reserves remain in deep or ultra-deep water, that ten-year timeframe is the context.

Onshore, however, is different. In Gujarat, for instance, you keep drilling, discovering and producing, but these quantities primarily compensate for natural declines in production. We have been producing around 6 million tonnes a year onshore for the last ten years because reservoirs naturally decline by about 6–7% annually, and new discoveries typically just offset that.

It is only when you find something large onshore—like the Rajasthan discovery many decades ago—that it becomes a game-changer. After Rajasthan, the biggest find was in the Krishna Godavari region. Other discoveries tend to be smaller pools that help maintain overall production levels. So, the ten-year figure does not apply universally. In the Middle East, for example, it can be two years, mainly because most of their large reservoirs are onshore.

Govindraj Ethiraj: Right. So if I were to now ask you a broader energy security question in the context of our overall situation: as per my understanding, we import roughly 85% of our crude oil needs, with the remaining 15% or so produced domestically. Are you saying that, most of the time, Indian oil companies are essentially fighting to maintain previous production levels?

Arun Kumar Singh: We should now be more hopeful because, for a long time, large reservoirs eluded us. One-third of our sedimentary basins were not open for exploration at all. These have now been opened, and everyone is lining up resources to explore effectively. Right now, for instance, we are drilling in the Kaveri deep water. Three to six months ago, we finished drilling there and made a discovery in the Mahanadi basin.

If these areas yield a big reservoir—well, you cannot change the geology, but you can certainly explore. Look at Guyana: they explored for 20 years, and many explorers came and went. Eventually, one more attempt found a reservoir so good that it is already producing around 700,000 barrels a day, and it could reach 1 million barrels a day next year or even more. That is the kind of breakthrough we are hoping for as well.

Govindraj Ethiraj: So if ONGC, as a company, has also invested overseas, that is one way to ensure you have fingers in many oil pies, so to speak. Tell us about ONGC overall in that context.

Arun Kumar Singh: Apart from meeting our domestic energy needs, ONGC is present in 15 countries through 32 blocks, via our 100% subsidiary called ONGC Videsh Limited (OVL). That arm currently produces around 10–11 million tonnes a year.

We produce roughly 40–42 million tonnes within India, so if you add that to the 10–11 million tonnes from OVL, it comes to about 50–53 million tonnes in total. In terms of daily global output, that is around 1 million barrels a day. However, India as a country consumes over 5 million barrels a day, so even if we count OVL’s production, we are covering only about 20%. We need to increase output both domestically and overseas.

Still, nothing works better than discovering resources in our own country. Another challenge today is that exploration spending worldwide has decreased—from about US $125 billion in 2013 to about US $50–52 billion a year now—partly due to the energy transition. As a result, most exploration is carried out by national oil companies, which have a different outlook and future goals. Our primary responsibility is therefore to explore Indian waters and onshore areas wherever any potential remains.

Of course, we do have producing assets abroad. If we find more producing or near-producing assets overseas, we will invest heavily there too, because that also contributes to our country’s energy security.

Govindraj Ethiraj: So tell me about ONGC itself. For example, you are investing in petrochemicals, and there are a lot of new energy initiatives—which I will come to in a bit. How does this petrochemical thrust fit with the exploration and production of oil? It is a bigger strategic question.

Arun Kumar Singh: If you look at ONGC, we own HPC too. ONGC acquired HPCL, and we also own OPaL, which is a 2-million-tonne petrochemical and chemical plant. In addition, ONGC owns MRPL. So, effectively, ONGC has a strong downstream presence, but our main focus remains exploration and production (E&P). Our downstream strength is managed through a different commercial structure.

Now, looking at petrochemicals, India’s per capita consumption is quite low compared to the global average. Our petrochemicals growth will outpace our overall energy growth, which could be around 3–4%. Petrochemicals, on the other hand, will likely grow at over 8%. Moreover, if the energy transition accelerates and we still have oil reservoirs 10 or 20 years from now, converting that oil into chemicals will remain essential, because demand for petrochemicals will continue to be high.

Hence, petrochemicals form a two-pronged strategy for us. First, it caters to national demand, and second, it secures our own future. A third factor is that it creates employment. The downstream side of petrochemicals offers huge job opportunities. For instance, our Dahej plant (OPaL) is only a 2-million-tonne unit, yet it supports around 2 lakh people directly and indirectly, simply because of the downstream industries linked to petrochemicals. So, “Petchem is Iran plus gradually everything” is how I would put it—meaning it underpins a wide range of growth opportunities.

Govindraj Ethiraj: So the employment is primarily due to the distribution of products?

Arun Kumar Singh: No, it is more about what you make downstream. You can manufacture tables, glass, chairs, car accessories—all from the commodity produced at the petrochemical plant. It is therefore the downstream side, which offers a huge opportunity. China may be the current world leader in cracking capacity, but we also have an advantage because our market will keep growing at 8–9% for at least the next 30–40 years.

So, petrochemicals meet immediate, medium-term and long-term needs. Over the long term, if a transition accelerates and we still have oil, the logical step is to convert it into petrochemicals. Also, I am the Chairman of MRPL and Dahej OPaL. ONGC already produces 2 million tonnes out of the total 4 million tonnes of petrochemicals and chemicals made by our group companies—where ONGC has more than a 51% stake.

Govindraj Ethiraj: If we look at renewables and sustainability, where you are also making significant investments, how should someone outside the company understand ONGC’s broader arc in this space?

Arun Kumar Singh: Gradually, what is happening globally is that oil and gas companies are trying to become broader energy companies. We have seen this notably in Europe: they started with gas, then went into power distribution and eventually power generation. One reason for that is, in a country like ours, the demand for electricity will grow much faster than the demand for petroleum.

ONGC has two or three key advantages in renewables. First, we have the financial muscle to invest. Second, when it comes to round-the-clock (RTC) power, we can combine gas and solar—other options exist, but they are evolving more slowly. Third, India needs more power overall, and fourth, ONGC has strong project execution capacity. We have been spending Rs 30,000–Rs 40,000 crore for many years, which shows that the organisation is capable of large-scale execution.

Very few people know that ONGC owns the ONGC Tripura Power Company (OTPC), which produces around 800 megawatts of power from our gas and supplies it to the North-East and even exports some to Bangladesh. So, the capability for power generation—and even transmission—already exists within pockets of ONGC. We also have a small transmission company in a joint venture with Power Grid Corporation of India Limited in the North-East.

Essentially, ONGC is present across the energy value chain today; the only difference is the scale of our involvement in each segment. Historically, for oil and gas companies, there was a natural hedge in being in upstream, midstream and downstream. If upstream did poorly, downstream might do well, and vice versa. For centuries, international oil companies survived because they were fully integrated. Operating in only one part of the chain makes you vulnerable to a single downturn.

In my personal opinion, the same will be true for today’s oil and gas companies: sooner or later, they have to enter other forms of energy. If you are only in exploration and production, and oil and gas take a back seat, you may have a limited future. However, in India, for the next 30–40 years, oil and gas demand will remain strong. But over the long term, if you want to survive for centuries, you must evolve into an energy company that looks at all sources—nuclear, compressed biogas (CBG), ethanol, oil, gas and more. If you are satisfied with just a few decades, then staying in a single segment might suffice.

Govindraj Ethiraj: And how does management time get divided between searching for new energy sources—like the coal-based methane you mentioned—and more traditional exploration?

Arun Kumar Singh: In the last year, around 92% of my personal time went into conventional exploration and production (E&P). ONGC Videsh Limited (OVL) is run independently by its Managing Director, and I only sit on its board as a Non-Executive Chairman. The same applies to Mangalore Refinery and Petrochemicals Limited (MRPL) and ONGC Petro Additions Limited (OPaL), where I am also the Non-Executive Chairman.

These subsidiaries do not take much of my time because they are managed by competent teams. My focus remains on E&P, and within that, about 40% of my time goes into efforts that could significantly improve exploration success or enhance production from existing fields. For instance, we have spent a lot of time finalising certain tie-ups, which involve negotiations and conditions from both sides.

Renewables do not take much of my time because we have set up ONGC Green Limited, which is managed independently. They only approach ONGC for funding, given our resources. My role there is largely confined to board meetings; beyond that, the subsidiary handles operations on its own.

Govindraj Ethiraj: Since you mentioned BP (British Petroleum) and your partnership with them, what do such companies bring in terms of reviving or rejuvenating existing oil wells? Is there a broader technology competence globally that we should aspire to?

Arun Kumar Singh: In most areas of exploration and production (E&P), ONGC is on par with international oil companies. When it comes to exploration and deep-water drilling, for instance, we can say that, over our 60–70 years, we have become as capable as any major. However, there are two or three specific areas where they do have more experience simply because they are larger and have encountered more varied scenarios.

One such area is what we call URIOR (essentially Enhanced Oil Recovery). These global oil majors have expertise that we are still catching up on. We already know about 60–70% of what is required; for instance, in Gujarat, ONGC is among the best at enhancing recovery from onshore fields. However, in certain carbonate reservoirs, their total initial oil-in-place (IOIP) recovery can reach 50%, whereas ours is about 29–30%. It is not that the oil is not there—70% is still underground. Globally, recovery depends on how effectively you can bring that oil to the surface. That is where we needed help, and only the biggest players have this depth of knowledge.

So, we floated a process and eventually selected BP. We expect that, particularly in our western offshore reservoirs, BP will help us figure out how best to pressurise the reservoir, which part of it to target, and generally how to maximise our recovery. That is the reason for our tie-up.

Govindraj Ethiraj: Countries like the United States have heavily invested in fracking and have effectively shifted from being a major oil importer to an exporter. India also imports from the US. What is the horizon in terms of new technologies or inputs in this space?

Arun Kumar Singh: Shale is a relatively recent phenomenon globally. In essence, it involves extracting oil directly where it is formed, rather than waiting for it to migrate to a reservoir. The US mastered this because its geology and the structure of its earth made it feasible. We have tried exploring shale in four or five areas, but so far, it has not been as favourable for us—partly because the shale formations here are not as promising as in the US or certain parts of Latin America. Should we discover something more promising in the future, we would certainly consider it further.

For now, in conventional oil and gas, there are one or two areas where we needed external expertise. This is particularly relevant to ONGC because our largest reservoir is still Mumbai High, where we have only produced about 28–29%. There is scope to reach 50% if we follow best practices. Many reservoirs around the world, of similar or older vintage, have recovery rates above 50%. Their learning curve is ahead of ours when it comes to enhanced recovery. There is no harm in learning from those who know more, and it is possible that, in time, we will match or exceed their expertise.

Govindraj Ethiraj: But I think the point that you made, which people may not fully appreciate, is that it is only governments that can invest at this scale and maintain this consistency in oil exploration. Or is that true only for some countries?

Arun Kumar Singh: It is that today, if you see, only integrated companies are, you know, able to have this kind of muscle over the long term. Fortunately for ONGC, generating this kind of money is not a problem because we have our oil and gas production, and then we invest. So we can continue this investment, and we have committed to investing at least Rs 10,000 crore a year in our exploration. We will keep doing that.

Another very relevant point for the country is that many small pools have been discovered by both private and public sector entities. Now there is a need for joint development to achieve scale and bring costs down. That is the path we are starting on now, especially in two or three parts of the country, particularly in deep water, where private companies have made discoveries, and we have too. We have begun discussions on how to do joint development so that both parties can share infrastructure. Individually, we might not be able to proceed, but together we can reduce the cost of production significantly.

Govindraj Ethiraj: So, I asked you about technology in relation to drilling and exploration. Another angle that people talk about is technology from the startup ecosystem and smaller, younger companies. What integration opportunities do you see there?

Arun Kumar Singh: ONGC has eight R&D institutes—four in Dehradun and four in other locations—that focus on applied R&D. They work on internal technology improvements, and we are especially proud of our drilling capacity, thanks to one of these institutes advising our drillers on what to do and what not to do.

But coming back to new technology, we have devoted significant resources to AI. Recently, we drilled a well purely based on AI predictions about where to locate it, and it turned out to be 98% accurate. That is a big deal because we believe our investment in AI will enhance efficiency in oil exploration and development over the next three or four years, particularly through more precise predictions. If you are off by even five kilometres in drilling, you might not find anything. This success has given us a lot of confidence that we can use AI more extensively to pinpoint well locations, especially in producing fields.

Govindraj Ethiraj: And this AI came from, like, the startup ecosystem?

Arun Kumar Singh: This was in-house—plus, of course, help from one big technology company, because they also helped us. You could say it was a mixed effort. But it looks like accuracy and efficiency in the oil and gas sector are going to improve immensely through AI, because we are underestimating its potential. One well has already shown 98% accuracy, which means there is much more we can do on this front. That is why we are accelerating the pace.

In fact, now we have given in ‘DOT’—which is our digital organisational transformation project. In that project, we have assigned 70 of our best IT resources and 30 specifically for AI. So, 100 bright people are working 24 hours a day, perhaps throughout the year, purely on improving AI and digital penetration in ONGC. I am 100% sure this will deliver significant efficiency gains in the next three to four years.

Govindraj Ethiraj: Startup—your last question is about startups. Let me flip that question a bit. If you had to explain why it is interesting to work for ONGC today—because when people traditionally think of ONGC, they might picture a more outdoor, oil-and-gas, offshore or onshore environment. The moment you mention AI, however, you are talking about attracting a different kind of talent altogether. So, what would you say to someone you want to bring into the company, particularly in these areas?

Arun Kumar Singh: So, there are three or four types of talent who join ONGC. First, as you mentioned, are the daredevils—those who do chopper rides every day, handling the challenging offshore production work. That is one category, and we need capable people there who understand equipment and processes thoroughly.

Second is the design side—figuring out how we should design our facilities. ONGC has some of the best institutes, and for those interested in design and R&D (we have several R&D institutes), ONGC offers a good fit.

The third area is purely digital technology. Very few people know that ONGC’s internal spending on digital initiatives is more than Rs 1,000 crore per year. We run a huge number of digital projects, literally in the hundreds. So, if you are looking for new, cutting-edge work, ONGC can be the right place.

Fourth, if you are seeking a long career in one organisation, ONGC might be the best option because it spans both the newest and the oldest spectrums of the energy industry. This gives you job longevity, as you can move around to different areas. Fifth, we regularly transfer people. If someone is doing well in one role, we might put them into another area as well.

So, you have old and new worlds coexisting together for the benefit of society, the country, and the individual. If someone wants an army-like life, the western offshore offers that, where you fly in a chopper every day, moving between platforms in your orange suit. Yet, if someone wants a purely digital life, ONGC is equally well equipped—there is an entire floor dedicated to that. It is not just one type of job; many kinds of people can join ONGC.

Govindraj Ethiraj: Mr Singh, it is a pleasure speaking with you. Thank you so much for your time.