India’s Energy Diplomacy and Overseas Hydrocarbon Projects

India relies on imports for over 85% of its domestic crude oil requirements and nearly 50% of its natural gas consumption. Energy diplomacy directs foreign policy toward securing steady crude supplies, diversifying import baskets, building cross-border energy grids, and acquiring equity stakes in overseas oil and gas exploration and production blocks to protect domestic energy security.

Institutional Framework and Key Operating Entities

Indian public sector enterprises acquire upstream exploration acreages, development fields, and producing blocks through international consortiums and bilateral government-to-government agreements.

ONGC Videsh Limited (OVL)

• OVL is a Navratna Central Public Sector Enterprise and the wholly owned overseas arm of Oil and Natural Gas Corporation (ONGC).
• It is the second-largest Indian petroleum company in terms of reserves and production, operating only behind its parent company ONGC.
• OVL holds participating interests in over 30 oil and gas projects across 15 countries spanning Russia, the Middle East, Latin America, Africa, and Southeast Asia.
• It produces equity crude and gas that is either sold in international markets or shipped back to domestic refineries.

Joint Consortia: OIL, IOCL, and BPRL

• Oil India Limited (OIL), Indian Oil Corporation Limited (IOCL), and Bharat PetroResources Limited (BPRL, a subsidiary of BPCL) form joint investment consortia for overseas block acquisitions.
• Indian consortia hold joint equity stakes in major Siberian fields in Russia and exploration blocks in Mozambique and the United Arab Emirates.
• GAIL (India) Limited manages downstream gas sourcing, overseas liquefied natural gas (LNG) contracts, and equity holdings in transnational gas infrastructure.

Geographic Distribution of India’s Overseas Upstream Assets

Indian energy assets span major hydrocarbon basins across Eurasia, Africa, the Middle East, and Latin America.

Russia and Eurasia

• Sakhalin-1 (Russia): OVL acquired a 20% participating interest in the Sakhalin-1 offshore field in Far East Russia in 2001, producing crude oil and natural gas.
• Vankorneft (Russia): An Indian consortium comprising OVL (26%), OIL (8%), IOCL (8%), and BPRL (7.9%) holds a 49.9% combined stake in the Vankor cluster in Eastern Siberia operated by Rosneft.
• Taas-Yuryakh (Russia): The consortium of OIL, IOCL, and BPRL holds a 29.9% participating interest in the LLC TYNGD field located in East Siberia.
• Imperial Energy (Russia): OVL acquired 100% ownership of Imperial Energy in 2009, operating onshore production blocks in the Tomsk region of Western Siberia.
• ACG Field and BTC Pipeline (Azerbaijan): OVL holds a 2.31% interest in the Azeri-Chirag-Gunashli (ACG) oil field in the Caspian Sea and a 2.36% stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline.

Middle East and West Asia

• Lower Zakum Concession (UAE): An Indian consortium led by OVL, with IOCL and BPRL, acquired a 10% participating interest in the offshore Lower Zakum field in Abu Dhabi in 2018.
• Onshore Block 1 (UAE): BPRL and IOCL hold a 100% exploration concession in Abu Dhabi Onshore Block 1.
• Block 86 (Oman): BPRL holds exploration and development rights in onshore fields within the Sultanate of Oman.
• Farzad-B Gas Field (Iran): OVL discovered the giant Farzad-B gas field in the Persian Gulf in 2008 under the Farsi Exploration Block contract.

Africa

• Rovuma Area 1 (Mozambique): OVL (10%) and the BPRL-OIL-IOCL consortium (10%) hold a combined 20% stake in the deepwater Rovuma Area 1 offshore block, which holds large natural gas reserves slated for LNG export.
• Block 5A and Greater Nile Oil Project (South Sudan / Sudan): OVL holds a 24.12% stake in the Greater Nile Oil Project and a 25% stake in Block 5A, though regional instability has periodically disrupted production.

Latin America

• Carabobo-1 (Venezuela): OVL (11%), IOCL (3.5%), and OIL (3.5%) hold equity alongside Repsol and PDVSA in the Orinoco Heavy Oil Belt.
• San Cristobal (Venezuela): OVL holds a 40% equity interest in the joint venture Petrolera IndoVenezolana for crude production.
• BC-10 Block (Brazil): OVL holds a 27% stake in the deepwater Campos Basin block operated by Shell.
• Mansarovar Energy (Colombia): OVL operates production assets in the Middle Magdalena Valley through an equal partnership with Sinopec.

Southeast Asia

• Block 06.1 and Block 128 (Vietnam): OVL holds a 45% stake in the producing gas field Block 06.1 in the Nam Con Son Basin and operates exploration Block 128 in the South China Sea.
• Shwe Gas Project (Myanmar): OVL (17%) and GAIL (8.5%) hold equity in the A-1 and A-3 offshore gas blocks in the Bay of Bengal, supplying piped gas to regional markets.

Cross-Border Pipelines and Regional Energy Connectivity

Energy diplomacy includes regional cross-border grid links, product pipelines, and long-range gas transit infrastructure.

Cross-Border Pipelines in South Asia

• Motihari-Amlekhgunj Pipeline: A 69-km cross-border petroleum pipeline connecting Motihari in Bihar to Amlekhgunj in Nepal, operationalized in 2019 by Indian Oil Corporation to supply refined products.
• India-Bangladesh Friendship Pipeline (IBFP): A 131.5-km pipeline inaugurated in 2023 connecting Numaligarh Refinery’s marketing terminal in Siliguri, West Bengal, to Parbatipur in Bangladesh for diesel transport.

Transnational Gas Pipeline Projects

• TAPI Pipeline: The planned 1,814-km Turkmenistan-Afghanistan-Pakistan-India pipeline designed to transport 33 billion cubic metres of natural gas annually from the Galkynysh gas field to Fazilka in Punjab, India.
• IPI Pipeline: The proposed Iran-Pakistan-India gas pipeline from the South Pars field, which stalled due to international sanctions on Iran and security issues in transit territories.

Strategic Petroleum Reserves and International Crude Storage

India builds emergency domestic storage infrastructure while leasing space to foreign national oil companies.

Indian Strategic Petroleum Reserves Limited (ISPRL)

• ISPRL is a Special Purpose Vehicle under the Oil Industry Development Board (OIDB), Ministry of Petroleum and Natural Gas.
• Phase-I Underground Rock Caverns: Operational capacity of 5.33 million metric tonnes (MMT) across three coastal sites:
  • Visakhapatnam, Andhra Pradesh (1.33 MMT).
  • Mangaluru, Karnataka (1.5 MMT).
  • Padur, Karnataka (2.5 MMT).
• Phase-II Expansion: Approved capacity additions of 6.5 MMT at Chandikhol in Odisha (4 MMT) and Padur in Karnataka (2.5 MMT) under a Public-Private Partnership model.

Commercial Crude Storage Agreements

• The Abu Dhabi National Oil Company (ADNOC) stores crude oil in the Mangaluru and Padur underground cavern facilities under operational lease terms.
• These storage arrangements allow India to retain first right of refusal over the stored crude during international supply emergencies.

Key Facts on India’s Energy Diplomacy and Overseas Hydrocarbons

• ONGC Videsh Limited was incorporated in 1965 as Hydrocarbons India Private Limited before taking its current name in 1989.
• The acquisition of a 20% stake in Russia’s Sakhalin-1 in 2001 remains one of the single largest overseas investments made by an Indian public sector company.
• India became an Associate Member of the International Energy Agency (IEA) in March 2017 to improve multilateral energy coordination.
• Over 60% of India’s crude oil imports pass through the Strait of Hormuz, making the Persian Gulf central to Indian energy security.
• India has long-term LNG supply contracts with major global suppliers, including QatarEnergy, RasGas, Cheniere Energy (USA), and Novatek (Russia).
• The Galkynysh gas field in Turkmenistan, the source for the TAPI pipeline, holds the world’s second-largest natural gas deposit after South Pars.
• India’s domestic strategic petroleum caverns at Visakhapatnam, Mangaluru, and Padur supply roughly 9.5 days of national crude requirement.
• Commercial oil companies in India maintain an additional 64.5 days of crude and refined product storage capacity in standard tank farms.
• The Baku-Tbilisi-Ceyhan (BTC) pipeline transports crude oil from the Caspian Sea to the Mediterranean coast of Turkey, bypassing the Turkish Straits.
• BPRL was established in 2006 as a dedicated upstream exploration and production subsidiary of Bharat Petroleum Corporation Limited.