Oil and Natural Gas Minister Hardeep Singh Puri informed Parliament that aging fields remain the primary culprit behind the downturn. While state-owned Oil and Natural Gas Corporation managed to limit its individual production loss to 2% by employing Enhanced and Improved Oil Recovery techniques, the broader national trend remains downward.
India’s Crude Production Slumps as Offshore Exploration Push Begins
A 3% decline in India's crude oil output for the 2025/2026 fiscal year marks the third consecutive annual drop. As mature fields age and production wanes, the government is shifting its strategy toward high-stakes, deepwater exploration to curb a heavy reliance on imports that currently satisfy 90% of domestic demand.
To reverse this, the federal government recently launched the National Offshore Exploration Scheme. Backed by $8.8 billion in support through 2031, the initiative targets the Krishna-Godavari, Cauvery, Mahanadi, and Andaman basins. By covering up to 50% of drilling costs for deepwater wells—which can cost upwards of $150 million each—officials hope to de-risk investments in these frontier regions. Alongside this exploration drive, the country is expanding its strategic storage capacity to insulate the economy from global supply shocks.
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