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India, which imports around 80 percent of the oil it consumes, is looking to boost its domestic oil production and has reportedly asked its state-owned producer, Oil and Natural Gas Corporation (ONGC), to weigh a potential sale of majority stakes in two large offshore oil and gas fields.
The Ministry of Petroleum of India has asked ONGC to consider a sale of 60 percent in the Mumbai High and Bassein oil and gas fields off India’s west coast to private firms, Reuters reported on Thursday, quoting a source in the Indian government with direct knowledge of the communication.
India is the third-largest crude oil importer in the world, and imports account for more than 80 percent of its petroleum consumption. The country has been trying to increase domestic production for years, as it has become especially vulnerable to oil price rallies which raise its import bill and lead to fuel price hikes.
In recent weeks, India has grappled with record gasoline and diesel prices as international crude oil prices have held at above $80 per barrel amid a tight market and the unwillingness of the OPEC+ group to release more supply to the market than the monthly increases in volumes decided in July. India has criticized OPEC and the OPEC+ alliance for “keeping the oil prices high” several times this year.
Now the country is looking to raise output at its own oilfields by opening them to private companies. The recent government request to ONGC was not a binding order to the state-run oil firm to divest stakes, according to the Reuters source.
Raising domestic output will not solve India’s oil import dependence, but it could bring some relief to the country when oil prices are rallying. Another question is whether India would be able to attract private companies willing to invest in its offshore oilfields.
Last month, India’s petroleum ministry secretary Tarun Kapoor told Reuters that U.S. supermajor ExxonMobil was in talks to potentially invest in some of ONGC’s deepwater exploration assets off India’s east coast.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.