New Delhi: The government must ensure that rising investments in the petroleum sector result in higher domestic oil and gas production while also accelerating the expansion of strategic petroleum reserves (SPR) to strengthen India’s energy security, a Parliamentary Committee on Public Undertakings said in an Action Taken Report on “Review of Performance of Petroleum & Natural Gas Sector CPSUs” tabled in Parliament on Thursday.
Despite capital expenditure (capex) by petroleum sector central public sector undertakings (CPSUs) increasing from Rs 1.33 lakh crore in 2020-21 to a projected Rs 1.70 lakh crore in 2024-25, domestic crude oil production has declined from 34.2 million metric tonnes (MMT) in 2018-19 to a projected 28.7 MMT in 2024-25.
The Committee on Public Undertakings said that the increasing capex alone cannot be a measure of success and urged the Ministry of Petroleum and Natural Gas (MoPNG) to ensure that the investments result in measurable production gains.
“The Committee are of the considered view that substantial investments in exploration and production should be accompanied by clearly defined performance benchmarks, periodic evaluation and accountability mechanisms,” the report stated.
The committee asked the government to periodically assess whether investments in exploration and production are reversing the decline in domestic crude output and sought a detailed report on the production outcomes of newly awarded exploration blocks and major capex projects.
In its reply, the petroleum ministry said it has rolled out several policy measures to boost domestic exploration and production. These include the Hydrocarbon Exploration and Licensing Policy (HELP), successive Open Acreage Licensing Policy (OALP) bid rounds, release of nearly one million square kilometres of offshore “No-Go” areas for exploration, and government-funded seismic surveys to improve geological data.
The ministry also informed the Committee that, over the last three years, 38 exploration blocks covering 1.73 lakh sq. km under OALP Rounds 8 and 9 have been awarded in offshore areas. It added that OALP Round 10, launched in April 2025, has offered 25 exploration blocks spread over 1.92 lakh sq. km across six states, aimed at expanding India’s domestic hydrocarbon resource base.
The Committee treated the ministry’s response as an interim reply and sought a more comprehensive update on the progress of the newly awarded fields and OALP rounds over the medium term.
The report also highlighted India’s vulnerability in energy security as the country imports nearly 89 percent of its crude oil requirement, leaving it exposed to global geopolitical disruptions.
The Committee said India’s heavy dependence on imported crude makes it susceptible to geopolitical events such as wars, sanctions and disruptions in key shipping routes including the Red Sea and Suez Canal.
It stressed the need to diversify crude procurement, strengthen strategic petroleum reserves and improve risk management practices.
The ministry told the Committee that India now imports crude oil from more than 41 countries across the Middle East, Africa, the United States, Latin America and other regions. It added that oil PSUs have been encouraged to maintain a balanced mix of long-term contracts and spot purchases to improve supply security and cost competitiveness.
The government also highlighted that India has created 5.33 MMT of strategic crude oil storage capacity at Visakhapatnam, Mangaluru and Padur through Indian Strategic Petroleum Reserves Ltd. (ISPRL).
It also informed that Indian oil and gas PSUs currently hold participating interests in 45 overseas assets across 21 countries. During the FY 2025-2026 (April-December), these assets produced 14.5 million metric tonnes of oil equivalent (MMTOE), accounting for around 30.5 percent of India’s domestic crude and gas production.
While the committee acknowledged the steps taken by the government, it asked the government to expedite the next phase of strategic reserve.
“The Committee desires that the Government fast-track the execution of Phase-II of the SPR programme,” it said in the report adding that diversification of crude supply sources, strategic petroleum reserves and overseas energy assets would remain “critical pillars of India’s long-term energy security architecture.”
The Committee said diversification of crude supply sources, expansion of strategic petroleum reserves and acquisition of overseas oil and gas assets would remain “critical pillars of India’s long-term energy security architecture.”
It added that while several policy reforms have been rolled out, their success would ultimately depend on delivering higher domestic production and reducing India’s dependence on imported crude.
(Edited by Pakhi Khare)
Also Read: Build-up stalled, House panel pulls up govt on underutilisation of funds for new crude storage sites