India’s growing dependence on imported crude oil has become a defining challenge for its economy. The country now imports nearly 85% of its oil requirements, creating a $220bn annual burden. Against this backdrop, three very different players — ONGC (Oil and Natural Gas Corporation), Reliance Industries Ltd (RIL) and BP Exploration — have joined forces in a new consortium to explore the Saurashtra basin offshore block.
The partnership, under the government’s Open Acreage Licensing Policy (OALP-IX), will focus on Block GS-OSHP-2022/2 off the coast of Gujarat. ONGC will serve as the operator with a 40 per cent stake, while Reliance and BP each hold 30 per cent. The project has been billed by the Ministry of Petroleum as a strategic collaboration to enhance India’s energy security.
Joint venture structure
By designating ONGC as operator of the Saurashtra block, New Delhi has tapped into the PSU’s long experience in Indian offshore oil exploration. Reliance, still best known for its KG-D6 gas project in the Krishna-Godavari basin, returns to upstream activity through a risk-sharing role. BP, which has been active in India for a decade, contributes global deepwater and sub-basalt expertise.
Investment commitments have not yet been disclosed, but under OALP India blocks are awarded based on both revenue share offered to government and the work programme promised. Costs will be divided in the 40:30:30 ratio. “Work programmes, not rhetoric, will determine success,” a senior official at the Directorate General of Hydrocarbons (DGH) observed.
Saurashtra basin geology
The Saurashtra basin is a Category-II hydrocarbon basin, meaning discoveries have been made but not yet proved commercially viable. The total basin area is 212,000 sq km, fully appraised, with 65,000 sq km under active operations.
The block itself spans 5,454 sq km in shallow-to-deep waters. Its geology includes Late Jurassic and Early Cretaceous shales with sufficient organic content to generate hydrocarbons. The challenge is sub-basalt exploration, as thick volcanic flows distort seismic signals. Advanced sub-basalt imaging and deepwater drilling are required — technologies BP has used successfully in other basins.
“Sub-basalt imaging is among the toughest frontiers in global oil exploration,” says a former ONGC geophysicist. “You need expensive surveys, patience, and advanced processing before even a single well proves its worth.”
Strategic benefits
For ONGC, the deal spreads financial risk, brings access to BP’s advanced offshore technology, and secures continued operator status in Indian waters. For Reliance Industries, it diversifies its upstream portfolio beyond KG-D6 and could integrate with its massive Jamnagar refinery, reducing feedstock imports. For BP, the consortium strengthens its India footprint and hedges its portfolio with an additional offshore play.
“India is a growth market for energy in all its forms,” a BP spokesperson said. “This collaboration reflects our confidence in India’s exploration policy framework.”
Policy framework and energy security
The government has marketed the joint venture as evidence of reforms under OALP-IX India, which offered 28 oil and gas blocks covering 136,596 sq km, including areas once restricted as “no-go” zones. Incentives include reduced royalties, marketing and pricing freedom, and a revenue-sharing model to align government and investor interests.
Petroleum minister Hardeep Singh Puri stressed the importance of collaborations: “Energy security demands both capital and technology transfer. Partnerships such as ONGC–Reliance–BP are a vital step towards reducing India’s oil import dependence.”
The Ministry of Petroleum believes even modest discoveries in the Saurashtra basin could contribute to reducing the country’s reliance on imported crude and support its broader energy transition goals.
Local impact and environmental concerns
In Gujarat’s coastal towns, optimism is tempered by scepticism. Engineers and contractors anticipate new jobs in offshore logistics, catering and marine services. “If advanced rigs are deployed, we expect work for supply vessels and repairs,” says Manoj Parmar, a young mechanical engineer in Rajkot.
But fishermen in Veraval worry about exclusion zones. “We are not against exploration,” says Devji Macchi, “but seismic surveys and safety limits cut into our fishing grounds.” Environmental groups have also raised alarms about the impact of seismic exploration on marine biodiversity, particularly dolphins and whales in the Arabian Sea.
Risks and internal dynamics
So far the project has avoided controversy. But alliances of this kind are rarely simple. ONGC’s cautious pace may clash with Reliance’s aggressive execution style. BP’s proprietary seismic algorithms may be difficult to share openly. Cost allocation and governance will require careful balancing.
“Aligning a public-sector mandate, a private conglomerate’s profit goals, and a supermajor’s global portfolio is as tricky as drilling under basalt,” says an analyst at CLSA.
Lessons from past disappointments
India’s upstream sector has been littered with unfulfilled promise. Earlier OALP rounds yielded few commercial discoveries. The Krishna-Godavari basin, once heralded as a “game-changer,” fell short of expectations amid technical failures and disputes.
This history fuels scepticism among investors. The difference this time is the tripartite structure — blending ONGC’s regulatory experience, Reliance’s capital strength, and BP’s offshore expertise. If it succeeds, it could serve as a blueprint for future OALP exploration blocks in India.
Long-term implications
If hydrocarbons are discovered, the rewards could be significant:
Energy security: even modest domestic production reduces India’s crude import bill.
Technology transfer: advanced sub-basalt imaging and deepwater drilling techniques would enhance local capabilities.
Economic impact: supply chain growth, employment generation, and government revenue through production sharing.
Failure, however, would reinforce doubts about India’s offshore potential and deter international oil companies from investing in future OALP bidding rounds.
A bold but brittle bet
The ONGC–Reliance–BP consortium is a bold experiment. It unites three players with divergent objectives under a policy framework that still faces credibility gaps. The geology is unforgiving, the economics uncertain, and the politics demanding.
But as one senior DGH official remarked, “India cannot afford to stand still. Saurashtra may be challenging, but it is precisely such frontiers that can redefine our energy security.”
For now, the bet is on. Rigs will move, seismic vessels will comb the waters, and Gujarat’s coastline will brace for another chapter in India’s long search for oil self-reliance. Whether the Saurashtra basin finally delivers more than geological intrigue remains to be seen.