India Forward — 20 May 2025
Spotlight: Policy and investment outlook for oil exploration and production in India
Recent regulatory changes present an opportunity as India looks to enhance crude oil exploration and development to achieve self-sufficiency.
By Rajeev Lala
Highlights
The Oilfields (Regulation and Development) Amendment Bill, 2024 and other anticipated regulatory changes come at an opportune time for India amid increasing global uncertainty.
The government and its national oil companies are both looking to ensure growth while improving revenue prospects.
Meanwhile, with exploration activity dwindling around the world, many producers are looking at India, which presents an investment opportunity as a major growth market.
Energy security meets revenue security
The global narrative in energy markets is shifting closer to what India has always pursued – an ‘all-of-the-above’ approach.
The government and its state-owned national oil companies (NOCs) alike are looking to plug mismatches in supply and revenue.
S&P Global Commodity Insights notes that India has a consistent decline in liquids production, while its gas markets are expected to grow significantly.
In the milieu, India is set to pursue a path where energy security meets revenue security. A path that helps realize the common objective of the government and the state-owned national oil companies (NOCs) to ensure growth while improving revenue prospects. Renewables and power generation have environmental credentials, but do not support government revenue buoyancy in the same way as petroleum sector.
Offshore exploration: An investment opportunity in India
Over the past few years, S&P Global Commodity Insights has noted that upstream exploration activity has reduced significantly across the globe, yielding fewer discoveries. Many international oil companies (IOCs) are facing selective portfolio exhaustion and are looking for fresh avenues of growth.
For IOCs and NOCs with limited ‘basin dominance’ across their portfolio, frontier exploration in new jurisdictions could offer this path to growth.
The IOCs and NOCs are now keenly looking at opportunities in India.
Looking forward
Although most IOCs and NOCs have reported mixed success in India’s energy markets so far, India continues to hold promise of being a large growth market. This opportunity has been further enhanced by the recent legislative changes in the country.
Looking forward, how India prepares for potential supply chain disruption would be an indicator to watch: the largely benign global oil price environment rewards India’s import strategy, but energy security now goes beyond physical supply security.
The diversification of India’s energy regulatory environment would also be important, especially as India seeks to draw investor intent in spaces like renewable energy and nuclear on its path to straddle energy security and energy transition.
This article was authored by a cross-section of representatives from S&P Global and in certain circumstances external guest authors. The views expressed are those of the authors and do not necessarily reflect the views or positions of any entities they represent and are not necessarily reflected in the products and services those entities offer. This research is a publication of S&P Global and does not comment on current or future credit ratings or credit rating methodologies.