India’s crude oil production has declined for the 11th consecutive year, prompting a $8.8 billion offshore exploration scheme to boost domestic reserves and reduce import dependence amid ongoing ageing fields and stagnation.
India’s crude oil output has fallen for the 11th straight financial year, underscoring the pressure on one of the world’s most import-dependent energy markets as New Delhi steps up efforts to tap offshore reserves. Oil and Natural Gas Minister Hardeep Singh Puri told Parliament that production declined again in the fiscal year that ended March 31, 2026, extending a long slide driven by ageing fields and weak discovery rates.
The government said domestic oil production has eased over the past three years mainly because mature fields are naturally declining. State-owned Oil and Natural Gas Corporation, the country’s largest explorer, limited its annual drop to about 2% by using enhanced oil recovery and improved oil recovery methods, according to the government.
The persistent decline has left India heavily reliant on foreign crude. Reports in The Economic Times and The Times of India said crude production fell to about 28 million metric tonnes in 2025-26, with import dependence near 89%. The Times of India also said gas output slipped, highlighting broader stagnation in domestic hydrocarbons as older assets continue to run down.
To arrest the trend, the government last month launched the National Offshore Exploration Scheme, its most ambitious offshore drilling push so far, with support of $8.8 billion through fiscal 2030-31. The plan offers financial backing for up to half the cost of deepwater exploration wells, a move officials say is meant to share risk and unlock frontier basins including Krishna-Godavari, Cauvery, Mahanadi and the Andaman region. A single deepwater exploratory well can cost $125 million to $150 million, making investment decisions difficult without state support.
The initiative also reflects a broader energy-security drive. India, the world’s third-largest crude oil importer, is seeking to reduce its vulnerability to supply shocks by building additional storage sites while encouraging exploration in deepwater and ultra-deepwater areas that could hold the country’s next major hydrocarbon finds.
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