by R. Sasankan

India's upstream oil and gas sector is dominated by two state-owned enterprises: Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL).

Although they are public sector undertakings, they are culturally very different. Oil India traces its roots to the British-owned The Burmah Oil Company, which managed early petroleum operations in Assam. Its legacy is steeped in lore dating back to 1887 when the first oilfield was discovered in India. The enterprise morphed into an Indian joint venture in 1959 and later a fully state-owned company in 1995.

ONGC, the country's largest oil exploration company, was launched on August 14, 1956, starting as an oil and gas division before becoming a commission and later a corporation. Its culture has been shaped by the prevailing zeitgeist in New Delhi's corridors of power, reflecting the aggression and abrasiveness of a society in a tearing hurry to get somewhere and enfolded by the infirmities of a brash monolith.

Their dominance in the stormy world of petroleum has been clouded by the fact that India has had to depend on imports to meet 88.7 per cent of its energy demand. Despite that, ONGC and OIL remain important players in the country's gruelling quest to find oil and gas in its sedimentary basins.

The two upstream companies are as different as chalk and cheese. And yet, the two entities have joined hands to explore three blocks awarded under the Open Acreage Licensing Policy (OALP). The Joint Operating Agreement (JOA) that they recently signed isn't the first tie up between the two. They already have some arrangements including a joint venture in a deep-sea stratigraphic drilling campaign across untapped offshore basins. The latest alliance signals a deepening of the relationship.

The looming question is: will it work?

As a journalist who covered both companies over an extensive career spanning four decades, I know that they are not comfortable with each other. For years, Oil India had to confine its operations to the North East. ONGC's discovery of Bombay High in the early 1970s totally changed the country's upstream scene, fostering an attitude of imperiousness that Oil India bigwigs have always resented.

Bombay High was discovered with the help of Russian geologists. The Russians identified its precise location and advised ONGC where to drill and how to manage the field in its infancy.

Bombay High has the distinction of being the biggest oil field of the country. The wells were flogged under an accelerated production plan adopted in the eighties and, at one point, met 80 per cent of the country's demand. It also stoked corruption in a number of areas as a scrum of ruling party politicians, top executives of ONGC and a cabal of external advisors squabbled over the spoils.

The euphoria over the discovery of Bombay High cast a cloud over the fortunes of Oil India which found itself being ignored by the powers-that-be.

Oil India's leadership of the 1970s and 1980s - steeped in the genteel culture of Burmah Oil Company - were unable to summon up the courage to fight for attention in New Delhi. OIL could not boast of a find like Bombay High and, therefore, it was brushed to the margins by the then leadership in the petroleum ministry. It did not help that Oil India belonged to the North East which, in any case, received stepmotherly treatment in the larger scheme of things.

The biggest problem that India faces today is that it hasn't been able to come up with a commercially-viable, major oil find since the 1970s. This is what makes the JOA between ONGC and Oil India so significant. If the two partners can bury their hatchets and differences, we could see a turnaround in the fortunes of India's oil sector.

My assertion is based on the decade-long interactions I have had with senior and middle level executives of both the companies. OIL has talented people with expertise that ONGC lacks in some areas; in turn, ONGC has the sort of aggressiveness that you won't find in OIL and which is so necessary in today's turbulent world of petroleum.

India needs to harness the right people with the expertise to discover oil and gas in its sedimentary basins. The country does not have large hydrocarbon reserves and, therefore, the task of discovering oil and gas is not going to be easy. Until now, India has tended to drill recklessly and has the unenvious record of coming up with the most dud wells. This is a criminal waste of resources and fosters corruption.

The figures are pretty stark. In fiscal 2025, ONGC drilled 578 wells, marking a 35-year high for the company and in fiscal 2024 it drilled 541 wells. ONGC has a an operational goal of 550+ wells per year across onshore and offshore fields. How many oil companies on earth drill so many wells in a year? The recently announced Samudra Manthan mission plans to add 150 deep water wells offshore basins.

To the best of my knowledge, there is massive corruption in the area of drilling. This has to end. The JOA between ONGC and OIL could be the beginning of a new saga characterised by honesty, a leash on reckless adventurism and a pledge to end corrupt practices. Let me emphasise that there are honest people in these companies. The country always benefits when honest professionals come together and shape the destinies of the organisations that they work for. Unfortunately, they have been marginalised by the scalawags in the system.

But I must sound a word of caution for the government's auditor, the CAG. Please remain vigilant. The auditors must pull up the people who waste precious money in a reckless mission to dig dry wells. The old adage goes, you cannot get butter by churning water! The current Samudra Manthan sounds prophetic enough. Hopefully, the Brave New World will bring prosperity to the common man instead of a privileged few!