ONGC Begins Andaman Offshore Drilling, Scouts Global Tech Partners To Boost Western Offshore Output

By Surabhi Gupta

Goa: State-owned Oil and Natural Gas Corporation (ONGC) is accelerating efforts across frontier exploration, offshore redevelopment and global technical partnerships as it seeks to arrest production decline from ageing fields while strengthening India’s long-term energy security.

In a significant milestone for domestic exploration, ONGC has successfully spudded a critical stratigraphic well in the frontier Andaman offshore region, even as it scouts for global technical partners to revive production from its western offshore assets and deploys advanced digital technologies to optimise operations.

Andaman Offshore: Testing India’s Frontier Energy Potential

ONGC recently spudded the stratigraphic well AND-P-1 on January 27, 2026, in the deepwater Andaman offshore basin, around 267 nautical miles from the Andaman and Nicobar Islands. The operation forms a key part of the government’s Samudra Manthan campaign, aimed at unlocking India’s untapped offshore hydrocarbon potential and reducing dependence on energy imports.

The Andaman basin is considered geologically complex and logistically challenging, with steep water depths, difficult seabed conditions and limited existing infrastructure. However, it is also seen as one of India’s most promising frontier basins, with ONGC having already drilled three wells in the region, indicating the presence of hydrocarbons.

Speaking on the sidelines of India Energy Week 2026, Pankaj Kumar, Director (Production), ONGC, said while basinal presence and hydrocarbon indications have been established, commercial viability will depend on further seismic interpretation and drilling outcomes.

“Hydrocarbon presence is there, but commerciality in deepwater depends on multiple factors, scale, location, distance from shore and development economics. At this stage, it would be premature to commit timelines or volumes,” Kumar said.

He added that the Andaman region remains a strategic focus area for both the government and ONGC, with further drilling and evaluation decisions to be taken after analysing data from the ongoing stratigraphic well.

Western Offshore Revival: ONGC Looks Beyond Mumbai High

Alongside frontier exploration, ONGC is intensifying efforts to revive production from its mature western offshore fields, which have seen output decline over the years due to depletion and ageing infrastructure.

The company has floated a tender to appoint a Technical Service Provider (TSP) for its western offshore fields, excluding the Mumbai High field, following encouraging results from a similar partnership with BP in Mumbai Offshore.

“We are now in the market for another TSP covering the Western Offshore, excluding Mumbai High. The tender has been floated, and we have personally reached out to the CEOs of 10 major E&P operators, including Shell, BP, Chevron, Exxon and others,” Kumar said.

He clarified that ONGC is not looking for service contractors, but only established exploration and production (E&P) operators with global offshore experience. The bid submission deadline is March 16, with ONGC targeting closure around June, subject to data-room reviews and technical discussions.

The move comes at a time when ONGC is grappling with long-term production decline from legacy assets. The Mumbai High oilfield, discovered in 1974 and producing since 1976, has been a cornerstone of India’s offshore oil production but has faced sustained natural decline.

BP Partnership Delivers Early Gains

To arrest this decline, ONGC appointed BP as the TSP for Mumbai High in April 2025. Under the arrangement, BP operates purely as a technical service provider, with no participating interest in the asset. The agreement includes a fixed fee for the initial two years, after which compensation is linked only to incremental production.

“All ownership remains with ONGC, and national interest has been fully safeguarded,” Kumar said.

The results, he added, are already visible. Since BP mobilised its team, the production decline in Mumbai Offshore has been stabilised. ONGC has added around 3,500–4,000 barrels of oil per day and 2–2.5 million standard cubic metres per day (MMSCMD) of gas above the minimum baseline.

“Importantly, current production is already above the agreed baseline profile, which gives us confidence in this model,” Kumar said, adding that lessons from the Mumbai Offshore partnership are now being extended to the broader western offshore.

ONGC operates some of India’s most critical offshore assets in the Arabian Sea, including Mumbai High, Bassein, Heera, Neelam, Panna–Mukta, and Tapti, along with multiple satellite fields. Onshore, it operates mature producing fields in Gujarat’s Cambay Basin such as Ankleshwar, Mehsana and Nawagam.

Production Outlook And Targets

As per ONGC’s second-quarter results for FY26, the company has managed to post a modest improvement in crude oil output. Standalone crude oil production (excluding condensate) during Q2FY26 and H1FY26 stood at 4.63 million tonnes and 9.314 million tonnes, respectively, marking a 1.2% growth over the corresponding period last year.

Gas production decline has also been largely arrested, narrowing sharply to 0.04% in Q2FY26 from 0.35% in Q1FY26on a year-on-year basis.

Kumar said ONGC has set a production target of around 22 million tonnes for the current financial year, with a slightly higher target for next year.

“We expect production to be marginally higher than last year. The fields remain largely the same, there are no major new additions, and the challenges also remain similar,” he said.

Digital Push And Offshore Project Execution

Beyond partnerships, ONGC is also investing heavily in digital transformation to improve operational efficiency and decision-making. A key initiative is the creation of a centralised command-and-control centre in Mumbai that will enable real-time monitoring of offshore and onshore operations.

The centre will track around 512 operational parameters, including well performance, drilling activity, equipment health and production efficiency. Advanced analytics and modelling tools will be used for optimisation, background analysis and predictive maintenance.

“This will allow us to see all operations in real time and optimise performance across assets,” Kumar said, adding that digital installation models deployed in offshore fields have already begun delivering value.

On the project execution front, Kumar highlighted progress in the Daman Upside Development Project, a major gas project in the Tapti–Daman block offshore western India. The project is expected to add 4–4.5 MMSCMD of gas, with production beginning from March and ramping up progressively.

ONGC has also advanced its Discovered Small Fields (DSF-II) projects in western offshore areas, involving the installation of six platforms and drilling of nearly 17 wells, targeting a mix of oil and gas. Some facilities are expected to be installed before the monsoon, with the remaining work scheduled post-monsoon.

In parallel, redevelopment of mature fields such as Ratna, which has been producing for over three decades, is underway, with ONGC preparing additional development plans to extend field life.

Balancing Maturity With Frontier Ambition

Taken together, ONGC’s strategy reflects a dual focus: squeezing additional value from mature assets through technology and partnerships, while simultaneously testing high-risk, high-reward frontier basins such as Andaman.

“Hydrocarbon presence is confirmed in Andaman, but commercial success will depend on how the data unfolds,” Kumar said. “Our approach is disciplined, deploy technology, collaborate where needed, and execute projects faster.”