Is It Time For India To Accelerate The Unlocking Its Untapped Hydrocarbon Basins ...
Rising geopolitical tensions in West Asia and the threat of disruptions along key energy routes such as the Strait of Hormuz have renewed attention on India’s heavy dependence on imported hydrocarbons, especially as global crude oil prices have surged past USD 116 per barrel. Any escalation in conflict in major energy producing regions can quickly translate into higher fuel costs, increased inflationary pressure and wider trade deficits. The current precarious situation due to the US- Israel war against Iran has revived debate on whether India should accelerate efforts to develop its own hydrocarbon resources at a time when global energy markets are becoming increasingly volatile.“West Asia remains a critical supplier for India’s energy needs. In 2025, about 48.7 per cent of India’s crude oil imports, 68.4 per cent of its LNG imports and more than 91 per cent of its LPG imports came from the region. This high concentration exposes the Indian economy to sudden supply shocks,” notes the Global Trade Research Initiative. The concentration risk has sharpened the urgency of building domestic resilience, particularly as supply disruptions are no longer hypothetical but a recurring feature of global geopolitics.
The Untapped Opportunity
India possesses significant geological potential that remains only partially explored. India’s hydrocarbon potential is not just theoretical. Official estimates place total resources at around 41.87 billion tonnes of oil and oil equivalent gas, of which nearly 12.9 billion tonnes remain undiscovered. Of the roughly 12 billion tonnes already identified, only a limited portion has been fully developed, underscoring the scale of untapped opportunity. The country has 26 sedimentary basins covering roughly 3.36 million square kilometres, but only a fraction of this area has been explored in detail. Offshore and deepwater regions in particular remain underdeveloped compared with global benchmarks, suggesting that substantial hydrocarbon reserves may still lie undiscovered beneath these basins.
However, the challenge is not simply one of availability but of access and feasibility. Much of India’s untapped potential lies in geologically complex regions that require advanced engineering capabilities and high capital investment. As Satish Ingavale, Director India, John Crane, explains, “Much of India’s untapped potential lies in technically complex offshore or frontier basins where exploration costs are high and geological uncertainty is significant.” Ingavale adds that reliability in high-pressure and high-temperature environments is critical, as equipment failure can disrupt operations and escalate costs.
Investment And Execution Realities
While policy reforms such as the Hydrocarbon Exploration and Licensing Policy and the Open Acreage Licensing Policy have improved transparency and investor access, execution challenges continue to define the sector. Exploration activity remains limited, with only about 10 per cent of India’s sedimentary basin area under active exploration, leaving vast regions unassessed and high risk for investors.
Ratan Bokadia, Managing Director, Oswal Energies Limited, points out that domestic exploration can play an important role but within clear limits. “Domestic exploration can reduce dependence significantly, but not eliminate it. It acts as a buffer against disruptions rather than a replacement for imports,” he says. Bokadia further notes that stagnant domestic production and rising demand mean outcomes will depend on faster execution, improved infrastructure and sustained capital deployment. Adding another dimension, Gauri Johar, Global Executive Director, Strategic Climate & Energy Initiatives, S&P Global Energy, highlights the evolving understanding of India’s resource base. “With newer exploration data and improved interpretation techniques, there is potential for a refreshed view of Indian basins,” she says. Johar emphasises that investors will remain cautious unless there is a clear balance between risk and return over long investment cycles.
Technology and Risk In Deepwater Exploration
A significant portion of India’s hydrocarbon potential lies in deepwater and ultra-deepwater regions, where exploration is both capital-intensive and technologically demanding. These projects require specialised infrastructure, advanced equipment and long gestation periods, making them inherently high risk projects.
Industry experts stress that success in such environments depends not only on policy incentives but also on operational reliability. Ingavale notes that technologies such as advanced sealing systems and condition monitoring are critical to ensuring safe and efficient operations in offshore facilities. Ingavale adds that downtime in upstream operations can significantly affect project economics, making reliability a decisive factor in both execution and investment decisions. At the same time, Bokadia underscores the importance of structural support mechanisms. He explains that risk-sharing frameworks, fiscal incentives and faster environmental clearances will be essential to attract investment into deepwater projects. Bokadia adds that global partnerships can help bring in the required technology and expertise, reducing both execution timelines and operational uncertainties.
Balancing Energy Security And Transition
Even as India accelerates its renewable energy ambitions, hydrocarbons remain central to meeting current and near-term demand. The country’s energy mix continues to be dominated by fossil fuels, viz., coal, diesel and gas, making a rapid transition difficult without compromising energy security.
Bokadia believes that the transition must be gradual and carefully managed. “The energy transition must be pragmatic and sequential rather than a sudden shift,” he says, adding that oil and gas will continue to anchor energy security even as renewable capacity expands. Increasing domestic production is essential to reduce vulnerability, even if it does not fully replace imports. Johar echoes a similar view, highlighting the need for a hybrid energy strategy. She notes that all forms of energy will play a role in achieving energy security, with a growing emphasis on carbon management and emission reduction technologies. Johar adds that combining cleaner fuels such as natural gas with renewables can improve system resilience while addressing immediate concerns such as air pollution.
A Call For Urgency
The need for faster action is increasingly being articulated by industry leaders. In recent posts on LinkedIn, Anil Agarwal, Chairman, Vedanta Group, called for a decisive shift in approach, stating, “We need to immediately declare this sector a national priority, cut cumbersome processes and facilitate rapid increase in domestic production. We have such a progressive government that this can happen. Some risk has to be taken and we should take it.”
His remarks reflect a broader industry sentiment that while policy intent has improved, execution speed and risk appetite must now match the scale of the challenge. As Agarwal suggests, faster approvals, a durable framework and a willingness to take calculated risks will be critical if India is to scale domestic production in a meaningful way.
Time To Promptly Unlock Its Untapped Hydrocarbon Basins
Expanding domestic hydrocarbon exploration presents a clear opportunity to strengthen India’s energy security, reduce import dependence, and build resilience against external shocks. However, the path forward will require coordinated action across policy, technology, infrastructure, and investment. The objective is not to eliminate dependence but to reduce vulnerability in an increasingly uncertain world.
The real test for India will lie in how quickly it can convert its untapped potential into reliable production, while simultaneously navigating the complexities of a global energy transition that is both inevitable and uneven. While the government has already taken some steps, with the Shanti Bill to encourage and facilitate private sector participation in wielding nuclear power plants in the country, a similar concerted push is needed to push the domestic hydrocarbon exploration.
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