Who is undermining India’s national oil company?

The ONGC exploration rig Sagar Samriddhi. The corporation has been drilling for oil since the 1960s. Courtesy ONGC
01 July, 2014

THERE ARE MANY REASONS why world leaders are willing to go to war for oil: along with natural gas, crude oil is crucial to electrify homes, provide piped heat to cities, light cooking stoves, fertilise crops, run cars, transport goods, fly across continents, deploy navies, power industries, build roads and manufacture polyester clothing, cold creams, ink, nail polish, perfumes, shoe polish, motor lubricants, and house paint—and in case of a blackout, when you cannot see any of this, to light a kerosene lamp. What water and air are to the human body, crude oil and natural gas have become to modern societies.

Most sovereign states nurture the ambition to be energy self-sufficient, even if they know it’s not possible. Sixty years ago, in pursuit of the independence and security that access to hydrocarbon fuels can bring, the Indian government created a specialised arm to hunt for oil and gas at home and around the world. Today, India is among the hungriest consumers of oil and gas on the planet, and the agency that was set up to satisfy this demand is among the three most highly valued corporations in the country. But it is failing in its core competence and existential mission: finding and producing fuel for the nation.


THE YEAR 1999 WAS A SIGNIFICANT ONE for India’s oil and gas industry. In January, the government threw the country’s hydrocarbon reserves open to private exploration for the first time. Under the New Exploration Licensing Policy, national and international state and private companies were invited to compete for the rights to drill at sites around the country. In NELP’s inaugural auction, 48 blocks, each potentially worth billions of dollars, were up for grabs. The process attracted 21 bidders, including India’s largest company by revenue, the state-owned exploration and production giant Oil and Natural Gas Corporation Limited.