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State-run Oil and Natural Gas Corporation (ONGC), which accounts for around 70 per cent of the country’s domestic crude oil and 84 per cent of its natural gas,
is taking a calculated shift in its business strategy in an effort to be “future-ready.” While the company has publicly announced its intention to foray into the imported liquefied natural gas (LNG) business, it is also quietly making significant moves into renewable energy, green hydrogen, compressed biogas, battery storage, and even nuclear energy.
This shift is part of ONGC’s strategy to achieve net-zero targets for scope 1 and scope 2 emissions by 2038. The company has committed an investment of Rs. 2 trillion by 2038 across multiple decarbonisation initiatives, including energy efficiency, flare reduction, renewables, green hydrogen, green ammonia, compressed biogas, pump storage and carbon capture units.
Declining crude oil production, ageing oilfields, and the absence of major discoveries in recent decades have posed significant challenges for India’s hydrocarbon sector. Domestic crude oil production dropped from 37.9 million tonnes (mt) in 2010-11 to 28.7 mt in FY25 – a fall of 24 per cent. Natural gas production also fell from 39,753 million standard cubic metres (mscm) to 36,113 mscm in FY25, a drop of 9 per cent.
In recent years, global demand for crude oil has weakened, leading to falling prices (before the recent West Asia crisis). The Paris-based International Energy Agency (IEA) predicts a further decline in crude demand by 2030, driven by sluggish economic growth, global trade tensions, the rise of electric vehicles, and the global shift away from fossil fuels for power generation.
It is in this environment that ONGC is working to reinvent itself, striving to secure its relevance – and India’s energy security – in a rapidly transforming global energy landscape.
“ONGC is purely an exploration and production (E&P) company. E&P is in trouble now as oil prices come down considerably,” Arunangshu Sarkar, ONGC’s director of strategy and corporate affairs. “There is a glut of oil worldwide – 0.6-0.7 million barrels of oil (per day) is excess now, due to the advent of new energy and low carbon mandates.” The glut, he added, may go up to 10-11 million per day by 2030. “In this scenario, we are thinking of making ONGC a future-ready company. This means we are now going for diversification other than the E&P business.”
ONGC’s LNG import plans are part of this diversification.
The company aims to source 3 million tonnes per annum (mtpa) of LNG by FY27, exploring long-term, low-priced sourcing deals. It is expected to procure gas from the Henry Hub in the US or from West Asia on spot deals, targeting the city gas distribution (CGD) sector from the fourth quarter of FY26. Henry Hub is a natural gas pipeline bub located in Earth, Louisiana. This move, the company says, is a strategic intervention to help India achieve its goal of increasing the share of natural gas in its energy mix to 15 per cent by 2030, from around 6.7 per cent now.
“Domestic production satisfies only about 50 per cent of our demand, with the remainder being bridged by imported LNG,” Sarkar said. “Projections indicate that by 2030, natural gas demand may reach approximately 210 billion cubic metre (bcm), requiring LNG imports of nearly 124 mmtpa to meet the shortfall. In this context, we are actively exploring opportunities in the LNG business,” he explained.
Industry experts also see this as the right move, considering natural gas is expected to remain crucial for India’s energy mix until there is a breakthrough in hydrogen technologies.
Greening the globe
ONGC’s push into renewables mirrors a broader global trend among major oil production.
Companies like BP, Shell TotalEnergies, and Equinor have all diversified into renewable energy. Even Saudi Aramco, despite its crude oil reserves of 267 billion barrels, is making aggressive moves toward renewable to align with Saudi Arabia’s goal of generating 50 per cent of its electricity from renewable sources by 2030.
“Unfortunately, our exploratory efforts in India have not yielded much in terms of results. It is not just ONGC, all global majors have ventured into renewable,” said R S Sharma, former ONGC chairman and an independent director of Indian Gas Exchange.
ONGC has established a wholly owned subsidiary called “ONGC Green” to accelerate its green energy initiatives. Through its joint venture, ONGC NTPC Green Pvt ltd, the company recently acquired a 100 per cent stake in Ayana Renewable Power, which holds 4.1 Gw of operational and under-construction renewable energy assets.
“We have a plan to have 10 Gw capacity by 2030. We already have around 4 Gw, the remaining is 6 Gw,” Sarkar said. “Apart from renewable energy, wind, and solar, we are also going for pump storage, green hydrogen, and battery storage.”
The strategy includes plans for a 2 mtpa green ammonia plant by 2030, seen as a crucial element of ONGC’s long- term decarbonisation goals. Additionally, ONGC is exploring the potential of small modular reactors (SMRs) for nuclear power generation, aiming to diversify India’s energy mix further. The company is assessing partnerships with firms specialising in SMR technology, focusing on safety standards and navigating the regulatory landscape. “We will start with a pilot project. It will be a floating vessel that will be carrying that SMR,” Sarkar added.
In the bioenergy segment, ONGC is working on establishing 25 compressed biogas plants, including one within its own production facility in Hazira. In green hydrogen, the company is conducting a pilot project that uses wastewater from its Mehsana asset to produce green hydrogen via microbial electrolysis.
ONGC has also acquired 100 per cent of IL&FB’s shares in Mangalore Special Economic Zone, bringing its combined stake in the venture, along with subsidiary Mangalore Refinery and Petrochemicals, to around 76 per cent. To enhance India’s energy security, ONGC is exploring the development of underground natural gas storage systems in collaboration with the Indian Strategic Petroleum Reserve. These storage solutions are crucial for managing supply fluctuations, ensuring stable natural gas availability, and bolstering national energy security.
While ONGC is diversifying aggressively, efforts are ongoing to ramp up production from existing oil and gas blocks and from new blocks acquired in recent bidding rounds.
Asked whether this diversification might dilute the company’s core business, Sharma said, “As a commercial enterprise, the company has to keep looking for growth opportunities. There is opportunity for every player and much more appetite for gas and renewables in the country.”
With a forward-looking approach, the company intends to keep its operations energised.
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