Chairman & CEO (CMD), Oil and Natural Gas Corporation Limited (ONGC)
ONGC's Arun Kumar Singh Reveals AI Secrets for Finding Hidden Oil | The Core Report
#Watch | In this episode of The Core Report, we dive into ONGC's bold experiment with AI in oil exploration. Join Govindraj Ethiraj as he talks to Arun Kumar Singh, Chairman and CEO of Oil and Natural Gas Corporation Limited, to explore the future of oil exploration, onshore vs offshore production, and renewables. Tune in to discover the latest insights from India Energy Week 2025. Don't miss out on this
(00:00) Introduction
(02:08) Oil Exploration in India
(03:39) Onshore vs Deepwater
(07:25) Current Production
(08:42) New deal with British Petroleum
(10:17) Big reservoirs have eluded ONGC (...
About Arun Singh
Arun Kumar Singh, Chairman and CEO of ONGC, stated in January 2025 that the company drilled a well based purely on AI predictions and achieved 98% accuracy, adding that AI investment is expected to significantly improve efficiency in oil exploration and development over the next 3-4 years. He also said that a new deal with BP could yield a 60% gain in recovery from a major reservoir. Singh has emphasized that India will require substantial fossil fuel use to sustain economic growth for the next 20-25 years, and that ONGC has a national responsibility to explore offshore and deepwater areas, committing to an annual capital expenditure of 35,000 crore rupees. In earlier remarks, Singh described the global push against fossil fuels at COP28 as "very hard" and noted that the energy transition presents challenges, including the need to socialize grid costs for renewable power. He stated that ONGC is committed to both oil and gas production and the energy transition, and that the company aims to bring as much gas as possible from its fields to land. Singh also said that India's energy demand will grow significantly over the next 10-20 years, and that ONGC will continue to explore and produce domestically.
Transcript (74 segments)
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Interviewer0:00
The Oil and Natural Gas Corporation is India's largest crude oil and natural gas company, which contributes about 71% of India's domestic production of crude. The crude that ONGC discovers and then extracts is supplied to refineries like Indian Oil, BPCL, HPCL, and MRPL. The last two, HPCL and MRPL, are also subsidiaries of ONGC, which in turn produce petroleum products like petrol, diesel, kerosene, and cooking gas or LPG, which we use in our daily lives.
To get a sense of scale, ONGC operates with some 14 seismic crews, manages 262 onshore production installations, 268 offshore installations including Mumbai High, 69 drilling rigs and 54 workover rigs, owns and operates more than 25,000 kilometers of pipeline including 42,000 kilometers of subsea pipelines.
My guest for today is Arun Kumar Singh, the Chairman and CEO of ONGC. He's worked for over 37 years in the oil and gas industry, both within India and globally. Just before ONGC, Singh was the Chairman and Managing Director of refining company BPCL, and he holds a degree in Mechanical Engineering from the National Institute of Technology in Patna.
Now, Mr. Singh, thank you so much for speaking with me. Let me go back, or rather let me restart with a statement you made recently. You talked about the challenges and the complexity of discovering oil, drilling for oil, and then obviously bringing it out. You said it takes 10 years, the whole process, and one of the biggest challenges for a country like India, for anyone trying to fill the energy gap, is to crunch that time. So tell us about why it takes so long firstly, and what's going on in the world of oil and gas to reduce that time.
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Arun Singh1:57
Thank you for asking this question. In fact, this 10 years is contextual, in the sense that if you are in deep water offshore exploration, to commence the exploration and then to bring oil or gas to the surface, that is a 10-year context. For onshore, particularly if you discover something, it could be as low as, from starting day, a maximum of 3 years.
But the global trend now, if you see, most of the oil and gas now being found in the last decade or so, the new discoveries are in deep or ultra-deep water. Guyana, for example, Exxon explored for so many years, now it is almost going to hit 1 million barrel production.
Why I said this, for deep water and ultra-deep water, because you start the process by taking a license, then you have to do seismic, then you have to process it, then interpret it, because it's very large data. Then you make a choice about a location to drill and see whether your prognosis is right or wrong.
So that drilling itself, planning a drilling in ultra-deep water, signing a contract, and then drilling, and finally discovering oil, that process itself, whatever you do, it takes around 4 years. Then after discovery, you will appraise it, how much is the oil, whether it's economic or not, that also takes around a year or so.
Then you have to source, you have to do subsea equipment, that project typically I don't think anybody has done in less than four years. And then if you have gas, you have another challenge of converting it, if you're close to shore fine, if not you have to convert into LNG to ship it. So nowadays if you see all the last four years, the numbers which have come from either Brazil or Guyana, the big numbers, these are all ultra-deep water.
In our context also, for our country, we believe now that earlier roughly 3.36 million square kilometers of sedimentary basin in our country, 1.2 was blocked, never explored, which has potential because what we call sedimentary basins. Those blocks the government released very recently, and now we expect a lot from there. But most of it, we also believe, will be ultra-deep water.
So in that context, I said we need to compress the time, compress the time of exploring, seismic exploration. Now for example, we know for sure that we'll keep doing exploration in deep water for the next five years, then we should contract a vessel on a long-term basis, and whoever is exploring there can use the same vessel, so then you can save all those times. Plus you can also compress the time of data processing and interpretation.
Similarly, this is one side where we said that in our country also, if we believe large potential is left in deep or ultra-deep water, that was the context in which I said 10 years. Otherwise, if you find something onshore, it's a game of today also. In Gujarat, if we keep drilling, we keep discovering, we keep producing. But these quantities just go in making up for the declining production.
From the onshore area, we've been producing 6 million tons of oil a year for the last 10 years, because what we call normal decline of reservoir is a very standard phenomenon, 6 to 7% you lose production every year from existing reservoirs. So you keep discovering new reservoirs in adjacent or nearby areas and you keep compensating for it.
But if exploration finds something big, like we found Rajasthan onshore decades back, and after that something big in our country, if I remember correctly, is Krishna Godavari. The rest are small pools which are just going to make up for the continued production.
So it was contextual. I wanted to summarize that it should not be said that 10 years it takes in all circumstances. Like for the Middle East, it may be two years, because Middle East is all big reservoirs are still onshore.
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Interviewer7:22
If you look at your portfolio today in terms of all the work that's going on, how would you define it? How much of the work is at what stage of actual oil being extracted?
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Arun Singh7:36
Right now our focus is Krishna Godavari. First of all, I must clarify to you that 60 to 65% of ONGC's production comes from offshore, primarily Mumbai offshore, and now of course we have added Krishna Godavari. In Krishna Godavari we have opened all the oil wells, they are moving well. We have to open more gas wells, that is planned in the next four to five months, and then we ramp up production.
So these are the big ones, but ONGC also produces around one-third of its oil in onshore, primarily in Gujarat, Andhra Pradesh, Northeast, and Tamil Nadu. These places we keep doing work every year, some new projects. But the biggest thing we are expecting now is our new deal with BP.
This is about increasing the recovery from Western Offshore Mumbai High. Mumbai High is a primary asset of ONGC even today. So our recovery so far has been 29-30% from whatever was initially in place. Now with BP, we are hopeful that the offer itself says we can expect a 60% gain from the baseline.
This should hold us in good stead for time to come, because it is a big reservoir and big opportunity in terms of improving our technology, processes, and systems, so that we produce much more than what we have been producing in recent years.
So our focus is on two sides: one is exploration, keep exploring deep water and wherever we find oil; and the second is to keep improving our existing reservoirs. For this, we need around 30 to 35,000 crore per year. We are one of the biggest capital spenders in the country, and this will continue for the next four to five years.
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Interviewer9:53
If I were to now ask you a more energy security question in the context of our overall situation. We import roughly 85% of our crude oil needs, so about 15% is domestically produced. And what you're saying is that at most times, Indian oil companies are fighting to keep the level of production where it once was. But we should now be hopeful because big reservoirs have eluded us for quite some time.
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Arun Singh10:24
One-third of the sedimentary basin was not open, it was kept, it was not open for exploration at all. So now we have lined up, everybody has lined up resources to explore. Right now we are drilling in ultra-deep water. We just three to six months back finished drilling and had a discovery in Mahanadi. If in this area we should hope for a big reservoir, you can't change the geology but you can definitely explore. And if you find a Guyana, then our energy needs are addressed.
Guyana was something they knew was going to be, obviously they must have known, which is why Exxon for 20 years kept exploring, and many explorers came and left, till somebody came and said let's try one more. And there they found a reservoir which is so good that today itself is around 700,000 barrels a day, and hopefully next year they'll reach 1 million barrels a day, plus they can produce more.
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Interviewer11:29
If ONGC as a company has also invested overseas, that's one way to make sure you have fingers in many oil pies so to speak. Tell us about how ONGC overall, other than the country, what you explained about addressing our energy needs.
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Arun Singh11:45
ONGC currently is present in 15 countries, around 32 blocks, through a 100% subsidiary called ONGC Videsh Limited. That production today is around 10 to 11 million tons a year. We produce 42 million tons within the country, so 40 plus 10, you add 50, 53, 54 million tons we have our share of production in the global pool, which roughly works out to 1 million barrels a day.
But our country is consuming 5 million plus, so even if we take our total quantity, we go up to maximum 20%. So we need to increase there as well as here. But nothing works better than finding something in your own country.
Now there is another challenge because if you see exploration, people have changed because of this energy transition. What was being explored in 2013 is not the case today. In 2013, the world spent roughly 125 billion in exploring; today it is at 50-52 billion dollars a year. So exploration has basically moved into the domain of national oil companies, because it has a different outlook and different future.
So our primary responsibility is to explore Indian waters and Indian onshore. Foreign, of course, we have producing assets. If we get some producing or near-producing asset, then we'll invest heavily, because that will also secure our country's energy needs.
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Interviewer13:41
Tell me about ONGC itself. You're investing in petrochemicals and there's a lot of new energy initiatives, and I'll come to new energy in a bit. But tell us about how the petrochemical thrust fits with the exploration and production of oil.
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Arun Singh13:58
That is a bigger strategic question. ONGC is owner of HPCL. ONGC acquired HPCL. ONGC is the owner of OPAL, which is also a 2 million ton petrochemical and chemical plant, and ONGC also owns MRPL. So literally ONGC in the downstream side is also very strong. But ONGC primarily itself is focused on E&P, with this downstream presence also strong but through a different commercial structure.
Now coming to petrochemicals, our petrochemical consumption in India is very low compared to global average. So our petrochemical story will continue to grow more strongly than energy. Because primary energy need could be 3 to 4% growth, but petrochemical growth will certainly be more than 8% plus.
Now there are two things in it. If transition gets accelerated and after say 10, 20 years you are still left with your reservoirs, naturally oil-to-chemicals is the answer, because the country will still continue to need huge petrochemicals. So petrochemicals is basically a two-prong strategy: one is national need, and second is it secures you for the future. Plus it also offers employment, the downstream side of petrochemicals offers huge employment opportunity in our country.
Like our simple OPAL unit is only 2 million tons, but the direct and indirect employment around its periphery in the Dahej itself is around two lakh people working there. Because petrochemicals, gradually everything, the employment is on because of distribution of products. You make downstream, you make table, you make glass, you make chair, car accessories, all these get made from the commodity you produce in your petrochemical plant.
We have a huge opportunity. China today is the world leader in terms of cracking capacity, but we hold another opportunity because we have a market and the market will keep growing at 8-9% for at least the next 30-40 years. So petrochemicals is a larger immediate, medium, and long-term need. Long-term need may come out of transition needs, what you do with oil, so you naturally convert into petrochemicals.
ONGC today, I am Chairman of MRPL and OPAL, where ONGC already produces 2 million tons of the 4 million tons of petrochemicals and chemicals that ONGC India, in the group company, makes, where ONGC is more than 51% owner.
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Interviewer16:52
If you were to look at the renewables and the sustainability side, wherein you're also doing a lot of investment, what does the arc look like to someone who's trying to understand the company from outside?
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Arun Singh17:05
Gradually, what is happening globally, oil and gas companies are trying to become energy companies. That happened in Europe in a big way. Because they entered through gas, then went to power distribution, then power generation. One thing is also true for our country: our electricity need will be far faster growing than petroleum need.
If that be the case, there are two or three strategic advantages ONGC has in terms of renewables. One is that it has the financial muscle to invest. Second is round-the-clock power can be a combination of gas as well as solar, because other options are working but at a much slower pace. Third, the country needs more power.
And fourth, ONGC has tremendous project execution capacity. It has been spending 30,000 to 40,000 crore for years, so unless the organization has the in-built capacity, it couldn't have done it. And very few people know that ONGC owns OTPC, that is a power company, ONGC Tripura Power Corporation, where we produce around 800 megawatts of power from our gas and sell it to the local Northeast and also to Bangladesh.
So the capability of ONGC, inherently in some pockets, is existing for power generation, even for transmission. It has a small transmission company which runs power transmission, that is a JV with Power Grid for the Northeast. So ONGC is present everywhere in the energy value chain today, only the size is different in different buckets.
Of course, that is a strategic question that others may differ with. Earlier, the natural hedging for oil and gas companies was to be in all three sectors: E&P, midstream, and downstream. If upstream doesn't do well, downstream will do well, and vice versa. That is the reason for all these years, for centuries, only integrated oil companies survived, because they had the full integrated value chain.
If you exist in only one part, you may not survive for long, because one bad time comes and you are wiped out. That same thing, in my personal opinion, will hold true for oil and gas companies. Sooner or later, they have to get into other forms of energy, because otherwise if you are only in E&P today and oil and gas takes a back step, then you have a short shelf life.
But that will not happen in India, because in the Indian context, for the next 30-40 years, oil and gas is going to kick. But if you take a long-term view, all oil and gas companies have to ultimately become energy companies. Energy can come from whatever source, even nuclear power, CBG, ethanol, oil and gas, so the entire primary energy basket that exists in the world, you should be in all places to survive for centuries. If you want to survive for a few decades, then remaining segregated is fine.
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Interviewer20:55
How does management time get divided between searching for new sources of energy or exploring new options like coal-based methane, versus the traditional core business?
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Arun Singh21:09
My personal time, I've taken account, 92% in the last two years has gone to conventional E&P, because OVL is run independently by its MD, there is a separate board, I only sit in the chairman's board meeting as non-executive chairman. I'm non-executive chairman of MRPL, I'm non-executive chairman of OPAL, so these don't take much of my time. Unfortunately, management is very competent in all the subsidiaries, so they run on their own.
But overall, I'm aware of the overarching situation. My personal time still goes, in that particularly at least 40% goes to exploration and enhancing production from existing fields. A lot of time has gone into stitching these tie-ups, and that is a win-win conditionality from both sides. Renewable also doesn't take much of my time, because we have created a company called ONGC Green Limited, it is run by that management, and only they come to ONGC for money because ONGC has the resources.
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Interviewer22:40
Since you mentioned BP and the partnership with them, what is it that companies like BP bring in these contexts of reviving or rejuvenating existing oil wells which India could then pick up? What's the kind of technology competence that lies across the world which maybe we should be aspiring for in some areas?
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Arun Singh23:08
In the majority of areas, we are at par with any international oil company. If you come to exploration, deep drilling, all that, we can say that over 60-70 years we are as strong as any IOC. There are two or three areas where they have more experience than us, because the simple reason is they are more exposed and have more experience as bigger companies.
One of such areas is EOR, what we call enhanced oil recovery. In that area, I would say they know something that we are yet to learn, to the extent that we also know 60-70% of things. Onshore, if you say Gujarat, ONGC is best in enhancing recovery from onshore fields. But when it comes to carbonates, their recovery of total initially oil in place in some fields is 50%. Our recovery is 29-30%. It is not that oil is not there, it is there, 70% we are leaving underground.
It depends on how much you are able to recover and bring to surface. In that area, we found we need some help, and we needed help from only those guys who are really big and really know this. So we floated a process, ran a process, through which we selected BP. So we expect that at least in our Western Offshore reservoirs, how to pressurize the reservoir, which part to pressurize, how to maximize our recovery from underground, that issue we wanted help on, and therefore we have done this tie-up.
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Interviewer25:28
Countries like the US, for example, are heavily into fracking and have found that as a way to tip their balance from being an oil importer to an oil exporter. India also imports from the US. What's the horizon in terms of new technologies or new inputs?
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Arun Singh25:51
Shale is a very recent phenomenon in the world. Shale is nothing but eating in the kitchen itself instead of kitchen to dining table. Wherever oil is getting formed or is not moving, you reach there and extract. The US mastered that, but fortunately their geology and structure of earth is such that it enables a very easy technology, they found a way to figure out how to do it.
We have done shale studies in five areas, but we are not as strong on shale in terms of the gift of nature to us so far. If we discover something different, that is one part of the technology. But shale technology so far we have not needed, for the simple reason that we have not found shale that is as good as the US, or for that matter even some Latin American countries.
But in conventional oil and gas space, in one or two areas we needed help. Particularly for ONGC it became very relevant because our largest reservoir is still Mumbai High, and we have not produced more than 28-29% there. So there is opportunity to go up to 50% very comfortably, because there are many reservoirs in the world where recovery has crossed 50%, with equal or older vintage.
They are ahead of us because of the learning curve, at least in enhanced recovery, how to recover more. There's no harm in learning from someone who knows, and maybe after some time we will know better than anybody else.
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Interviewer27:50
The point you made that maybe people don't fully appreciate is that it's only governments which can invest at this scale, and the consistency in oil exploration. Or is it that only for some countries?
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Arun Singh28:07
Today if you see, only integrated companies are able to have this kind of financial muscle. Fortunately for ONGC, this kind of money generating is not a problem, because you have your oil production today, gas production, then your investments, so you can continue these investments. We have committed to invest at least 10,000 crore plus per year in our exploration, so that we will continue to do.
One more area which is very relevant for the country to know is that there are many small pools discovered by the private sector as well as the public sector. Now there is a need to do joint development to bring scale and also bring the cost down. That path we are now starting, particularly in two-three geographies of the country, deep water. Private companies have also discovered, we have also discovered. So that part we are starting our journey on, how to do joint development, so that there's economy of doing it for both of us, because both independently possibly can't do it. If you join together, many infrastructure gets commonly shared and your cost of production comes down.
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Interviewer29:27
I asked you about technology, but that was more to do with drilling and exploration technology. Other technology, when people talk about, is really in the startup ecosystem and smaller, younger companies. What are the integration opportunities you are seeing?
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Arun Singh29:40
ONGC has eight institutes, and they do R&D. Of course, applied R&D, not pure science, but application of science. We have eight institutes, four are in Dehradun, remaining four are outside. These are internal technology improvement institutes. Today in drilling, we should be very proud, our drillers' capacity and all that, because there is an institute which keeps feeding them regularly what to do and what not to do.
On the technology side, we have internally devoted a lot of resources to AI. And now we drilled a well recently purely based on AI outcome, to locate a well, and we found 98% accuracy of prediction. That is something we should be very proud of. Our investment in AI is going to pay big in terms of efficiency in the next 3-4 years, at least in oil exploration and development.
Because the accuracy of our prediction, we follow a path that it will find so much there, but if you drill in a wrong place by even 5 kilometers, then you don't get it. But this case has given us lots of confidence that we can use AI more extensively in locating wells, particularly in producing fields.
This AI came from in-house, plus of course help from one big technology company, so a mixed effort of both. But it looks like that accuracy and efficiency in the oil and gas sector is going to improve immensely through AI, because we are underestimating its potential. One well has shown us 98% accuracy, so there is something we can do more on this side.
Therefore, we are accelerating the pace. Now we have given in DOT, our organizational digital transformation project, 70% resources, our internal people, and 30% for AI. So 100 bright people are working 24 hours around the clock, throughout the year, on improving AI and digital penetration in ONGC, because this is the area which will give us good efficiency. I'm 100% sure it will pay for itself in 3-4 years in a big way.
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Interviewer32:33
Your last question on startups, let me flip that question a little bit. If you wanted to say why is it interesting to work for ONGC today, and I think you already in a way answered. Traditionally you think of ONGC as more outdoor oil and gas, offshore, onshore, but the moment you say AI, obviously you are attracting a different kind of people. How would you, or what would you say, to attract someone to the company today, particularly in these areas?
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Arun Singh33:07
There are three-four types of talent which ONGC attracts. First is, of course, those who are daredevils, those who want to do chopper rides every day, plus you have the challenging offshore production. There also we need good talent to run the show on a day-to-day basis, particularly a good understanding of working equipment and processes.
Second is the design side, how we should design our facilities. There also ONGC has one of the best institutes, and therefore those who are interested in designing and R&D, and I told you about our R&D institutes, for them also ONGC is a space.
Third space is now the pure digital technology space. Very few people know that ONGC's internal spend on digital and all that is 1,000 crore plus per year. It literally runs a huge digital project inside. Those who want to have the new world, for them also ONGC is the right place.
Fourth, those who want a longer life in any company, ONGC is the best place, because it is in the newest spectrum as well as the oldest spectrum. So you have longevity of one organization which is assured in the long run, because of what I explained previously, that you can work anywhere.
And fifth, we transfer people across. It is not that if you are good in one place and we find you can do well somewhere else also. New world and old world, both coexisting together for the betterment of society and country, and for the individual.
If somebody wants an army-like life, Western Offshore is army life. Every day you fly in a chopper every morning, you go from one platform to another, second platform to third platform, in a dungaree, in an orange suit. If somebody wants a pure digital life, that also ONGC is well-equipped, we have a building dedicated for that. So all kinds of people can join ONGC, that is my offering.
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Interviewer35:38
Mr. Singh, a pleasure speaking with you. Thank you so much for your time.
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Arun Singh35:41
Thank you.