Fossil to future: ONGC charts a bold path; pivots to LNG, renewables

State-run Oil and Natural Gas Corporation (ONGC), which accounts for around 70 per cent of the country's domestic crude oil and 84 per cent of its natural gas, is taking a calculated shift in its business strategy in an effort to be "future-ready." While the company has publicly announced its intention to foray into the imported liquefied natural gas (LNG) business, it is also quietly making significant moves into renewable energy, green hydrogen, compressed biogas, battery storage, and even nuclear energy.

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This shift is part of ONGC's strategy to achieve net-zero targets for scope 1 and scope 2 emissions by 2038. The company has committed an investment of Rs. 2 trillion by 2038 across multiple decarbonisation initiatives, including energy efficiency, flare reduction, renewables, green hydrogen, green ammonia, compressed biogas, pump storage and carbon capture units.

Declining crude oil production, ageing oilfields, and the absence of major discoveries in recent decades have posed significant challenges for India's hydrocarbon sector. Domestic crude oil production dropped from 37.9 million tonnes (mt) in 2010-11 to 28.7 mt in FY25 - a fall of 24 per cent. Natural gas production also fell from 39,753 million standard cubic metres (mscm) to 36,113 mscm in FY25, a drop of 9 per cent.

In recent years, global demand for crude oil has weakened, leading to falling prices (before the recent West Asia crisis). The Paris-based International Energy Agency (IEA) predicts a further decline in crude demand by 2030, driven by sluggish economic growth, global trade tensions, the rise of electric vehicles, and the global shift away from fossil fuels for power generation.

It is in this environment that ONGC is working to reinvent itself, striving to secure its relevance and India's energy security - in a rapidly transforming global energy landscape.