Oil India targets 3.8 mn tonnes of oil production in FY24: CMD Ranjit Rath

Company will drill 60-plus wells in FY24 in Assam and Arunachal Pradesh, up from 45 in FY23

The public sector energy producer Oil India (OIL) is expecting a series of new wells and gas fields to go into production in Assam and Rajasthan soon. This development will enable the company to achieve a crude oil production of 3.8 million tonnes (mt) in the current year, said Chairman and Managing Director (CMD) Ranjit Rath. This new target represents a 20 per cent increase over the 3.18 mt of oil produced in 2022-23 (FY23).

Rath said at a media briefing that the company expects three gas fields under production enhancement contracts to go live. These fields include Lakwagaon-1, where higher production is expected from the Sesabil area (discovered in January), and the Bagjan gas field, which will undergo more intensive exploration. Additionally, OIL aims to aggressively expand its gas portfolio.

“A new gas pipeline from the Kumchai field will be connected to the main production area by December. A number of additional development wells will also come onstream,” Rath said.

Furthermore, 16 wells in Rajasthan will be put under a cyclic steam stimulation, a method for producing heavy oil by injecting steam into a well.

The company is preparing to award contracts for hydrofracking, a process that involves injecting water, sand, and/or chemicals into a well to extract oil or gas reserves.

“This production is expected to begin in the fourth quarter of 2023-24 (FY24) or early next year,” Rath said.

In terms of drilling, OIL plans to drill up to 60 new wells in FY24, up from 45 in FY23 and 38 in 2021-22. To support this increased drilling activity, the company has awarded contracts for two additional drilling rigs and extended the engagement tenure for existing rigs.

“This year, in Assam and Arunachal Pradesh, we plan to drill 60-plus wells,” Rath said.

In FY23, OIL expanded its total acreage to 62,911 square kilometres and has a total inventory of 191 mt of oil equivalent (mtoe) in domestic assets and 51 mtoe of overseas assets, including both proven and potential reserves.

Net-zero by 2040

OIL is planning to invest around Rs 25,000 crore ($3.38 billion) to achieve a net-zero status by 2040.

In the 2G ethanol space, OIL is looking to invest Rs 8,000 crore, Rath said.

The company also plans to establish 20 kilotonnes per annum (ktpa) of green hydrogen production with a total estimated financial outlay of Rs 2,000 crore. Setting up a 2 ktpa production facility takes about Rs 200 crore, Rath said.

The company will set up 25 compressed biogas plants with a modular build-up of 2 tonnes per day to 20-30 tonnes per day. Additionally, a 640-megawatt solar power plant in Assam and a 150-megawatt solar plant in Himachal Pradesh are also planned.