We had HPCL yesterday with us and we have Oil India today.
Indeed, Oil India is the next management on the show. The stock is down 8% in the last one year. In fact, the company had cut down the oil production guidance to 3.55 million tons versus 3.8 million tons in Q2. To discuss this, the impact of the US action on Venezuela, we're now joined by Dr. Ranjit Rath, Chairman and Managing Director at Oil India. He's also the Chairman of the Numaligarh refinery. Thank you very much. Happy New Year to you, your family, and the entire team. What we'd like to discuss with you is: will more crude supply come to the market post the US action on Venezuela? Just get your thoughts on what's happened geopolitically, the production targets for FY27, and finally the crude pricing outlook. But Doctor, just beginning with what's happened with respect to Venezuela, because you all have a very small, I believe three and a half percent stake in the Carabobo project through your subsidiary. Do you all have dividends which are stuck? If yes, can you quantify what is the amount that's been stuck in sanctions? And if indeed this project now resumes with the US taking over, what would be the new investments you will require? Would you be asked to pay up your share of capex?
Okay, first of all, thank you very much. I will break it into small pieces and then answer you. And yes, a Happy New Year to all of you in the studio and to all your viewers on behalf of Oil India Limited. The first question is the future outlook of crude. Can I take that first, or the other one?
No, let's start with Venezuela and your presence there, exposure.
All right, so yes, we have a stake, three and a half percent, in the Carabobo field. The current investment exposure is about $60 million US. And yes, one thing is for sure: while we will wait and watch the developments there, the production possibilities now look better, which is good for our investment terms. And should there be a requirement, we would like to enhance our investment, because that's what is needed to enhance production from this excellent field that Venezuela is having. The prospects are good. So I'm sure it'll take some time to stabilize, to kickstart the production or to ramp up the production. So we will wait and watch, and should there be a need, yes, we will invest.
Okay. And when you say your exposure is $60 million in the Carabobo, is that the stock dividends?
Or is the amount that you've invested so far?
Invested so far. What is required is we have to ramp up the production first. The current production level is at very low, so we do foresee there is a good opportunity sitting there.
Okay. And are there any stuck dividends? Because we understand some... none for you?
I think nothing pertains to Oil India Limited about that.
Okay. All right. Hi Doctor. Good morning and good to see you. Let's talk about the operational efficiency then. You drilled around 32 wells in the first half of the year, which is in line with the target. What is the target for the remainder of the year, and how much will you be able to do? Give us your guidance with regard to production targets, both on gas as well as on oil.
Okay. Excellent. I'm glad that you have started the question with drilling, which is closest to my heart. Slight corrections: as we speak, we have already completed 50-plus wells, and I should be able to explain a bit. When we say drilling, the drilling component comprises of three parts. One is rank exploration, which is currently going on in our exploration license fields, which includes our offshore exploration efforts both in Kerala-Konkan and in shallow water. As far as near-field exploration is concerned, that's where we do exploratory drilling to resurrect or ensure accrual of additional oil as part of our reserve replacement ratio. As far as development drilling is concerned, that remains our focus in order to enhance our production. Therefore, these three buckets of drilling this year, our target is 80. And just to give you a perspective, three years ago we were drilling about 30 to 35 total wells. This year our target is 80. We will definitely cross 75, that's for sure, because as we speak we have already completed 50-plus wells. Having done this kind of drilling, we are looking at two things. One, we should be able to maintain the production level. But before that, I must tell you, being part of mature fields that we operate on, we encounter a decline of pressure, which leads to production decline of about 10 to 12%. So first, as part of our reservoir management principle, we undertake very aggressive workover and development drilling, which leads to arrest of this production decline, 10%. And on top of it, our guidance this year would be about two to two and a half percent more. Last year we did 6.71 million metric tons of oil and oil equivalent, which is both oil and gas included.
Highest ever. And this year also we aim to surpass that number.
Okay. All right. And to split it up, sir, earlier you were talking about oil production, I think 3.55, and gas, I think it was around 3.6. So ballpark, that should be the guidance, right?
That will be the guidance. The best part is we are also looking at cost optimization, which you touched on, as part of our efforts to enhance financial prudence.
Okay. All right. Doctor, just one more point I wanted to ask you with regard to the Numaligarh refinery expansion: the timelines, the expected distillate yield, what is the capex that has been made, how much more is expected, and how is the ramp-up expected on this particular refinery?
Okay, good. I've got good news to share. This is already public information. As far as the commissioning of the 9 million ton capacity expansion is concerned, we have kickstarted the commissioning on 31st December as promised. That means the mother unit, that is the crude distillation unit, we are already having crude in. Now, as you would appreciate, the entire process of commissioning of all the units will take about six to nine months, and then another one quarter or so for stabilization. As far as capex is concerned, we are looking at a total capex of about 40,000 crore, which includes the refinery 9 million ton complete, the Paradip-Numaligarh crude oil pipeline, 1,635 kilometers complete, a polypropylene unit, 360 KTPA, juxtaposed to the current refinery function, complete. So that is the bouquet of investment we are looking at.
Okay. Got that, Doctor. That's very helpful.
Good morning, sir. Happy 2026 to you and your team. Prashant here. It's fascinating stuff what you're describing to us, but we're talking about oil, and you would agree with me the last one year has been about geopolitics and oil, and both are kind of linked at the hip. Can't get away too much. So my colleague Rema asked you about Venezuela. Let me turn your attention towards the other hot spot, which is of course Russia. Has Oil India been able to repatriate some of the stuck dividends from your joint ventures in Russia? Some $300 million in dividends were stuck. Has that come in?
So I'll give you a perspective. As oil and gas operators, we are well prepared for geopolitics. That becomes one of our building blocks of decision making. As far as investments in Russia is concerned, we have got two investments. One is Taas-Turyusky and the other one is Vankor. As far as Taas-Turyusky is concerned, we have already got 100% dividend out of our investment. Now it's on a self-sustaining mode. Vankor, it's about 90% of dividend we have already received. Now what is stuck is the money which we have received but it is in our account at SBI in Russia. So we are not worried at all in terms of the value of the money which is there, because it is with us. It's only a matter of time. We will figure out how to get this money and then plow it back in some other overseas investments. So we are not worried at all.
Yeah. So this is basically an SBI account, your SBI account in Russia.
And it's stuck because of capital controls, SWIFT-related restrictions, etc.
