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Indian Oil Companies Set to Ramp Up Investments in FY 2024–25


Indian state-owned oil companies, including ONGC and Indian Oil Corp (IOC), are gearing up to significantly boost their investments in the upcoming fiscal year 2024–25, with plans totaling approximately Rs1.2 trillion. This substantial investment, representing a 5% increase from the current fiscal year’s Rs1.12 trillion, underscores the sector’s commitment to fortify oil and gas exploration, refinery expansions, petrochemical ventures, and pipeline infrastructure to cater to the burgeoning energy requirements of India’s rapidly expanding economy.

ONGC, the leading oil and gas exploration company, has allocated Rs308 billion for capital spending in the next financial year. This investment will primarily focus on discovering new oil and gas reserves and bringing existing discoveries into production, marking a slight uptick from the Rs305 billion capital expenditure in FY2023–24. Furthermore, ONGC’s international arm, ONGC Videsh, is poised to witness a substantial 68% increase in investment to Rs55.8 billion for overseas oil and gas operations in FY2024–25.

Meanwhile, IOC, India’s foremost oil refiner, is set to emerge as the largest investor among its counterparts, with a proposed outlay of Rs309.1 billion. The bulk of this investment will be directed towards expanding and modernising its seven refineries. Additionally, IOC plans to allocate Rs32.99 billion to the petrochemical sector and Rs2.36 billion to its oil and gas exploration portfolio.

Other major players in the sector are also ramping up their investment plans for the upcoming fiscal year. Bharat Petroleum Corp Ltd (BPCL) aims to increase capital spending by 30% to Rs130 billion, primarily focusing on bolstering its core refining business. Similarly, Hindustan Petroleum, an ONGC subsidiary, plans to invest Rs125 billion, while Oil India intends to raise its investment to Rs68.8 billion, reflecting a concerted effort to bolster production and operational capabilities.

However, gas utility GAIL India anticipates a reduction in planned investment to over Rs80 billion, down from Rs97.5 billion, as it nears completion of its pipeline grid expansion projects.

In a separate development aimed at strengthening the energy supply chain, Mangalore Refinery and Petrochemicals has entered a significant five-year long-term gas supply agreement with BPCL. Under this agreement, BPCL will provide 0.43 million metric standard cubic meters per day of regasified liquefied natural gas to MRPL’s refinery and petrochemical facility in Mangaluru from the Cochin terminal, thereby ensuring a reliable and uninterrupted supply of natural gas for industrial operations.

These strategic investments and collaborations underscore the oil sector’s resilience and commitment to meeting India’s growing energy demands while driving economic growth and sustainability in the region.

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