Oil India expands exploration acreage by 85% after sweeping OALP IX block bids

How did Oil India win all 9 blocks in OALP IX and double its exploration reach?

Oil India Limited has significantly advanced its upstream growth strategy after securing nine blocks under the Government of India’s Open Acreage Licensing Policy (OALP) Round IX. The company achieved a 100% success rate by winning all nine blocks it bid for, adding over 51,000 square kilometres to its exploration portfolio and boosting its total acreage by 85% to nearly 110,000 square kilometres.

The state-owned Maharatna enterprise — operating under the Ministry of Petroleum and Natural Gas (MoPNG) — will operate six of these blocks independently, while the remaining three will be developed through consortium arrangements. This acquisition marks a bold expansion into challenging offshore zones and untapped onshore regions like Meghalaya and the Cambay Basin.

This development not only consolidates Oil India Limited’s position as a key energy explorer in India but also signals a strategic realignment with national energy priorities such as self-reliance, deepwater resource development, and basin diversification.

What is the stock market’s response to Oil India’s OALP IX success?

Oil India Limited, traded on the Bombay Stock Exchange (BSE: 533106) and National Stock Exchange (NSE: OIL), saw a marginal uptick in share price following the announcement on April 15, 2025. Intraday volumes rose by over 12% compared to the monthly average, indicating renewed investor interest in upstream expansion themes.

At the close of trading on April 15, shares of Oil India Limited settled at ₹365.95, up 1.96% from the previous session. Analysts have interpreted the move as sentimentally positive, though structurally long-term in nature. The exploration acreage boost, especially in deepwater basins, has been factored in as a sign of improving reserve potential and forward-looking growth.

Brokerage sentiment remains largely neutral to positive, with most firms recommending a ‘Hold’ to ‘Accumulate’ rating on the stock. While the OALP IX outcome enhances long-term earnings visibility and strategic reserves, analysts have flagged the need for near-term updates on capex plans, offshore drilling timelines, and monetisation strategies before upgrading to a ‘Buy.’

From a valuation standpoint, Oil India remains one of the cheaper public-sector energy stocks on P/E and EV/EBITDA metrics. However, its stock performance historically lags that of ONGC and other integrated peers due to narrower refining margins and limited retail presence. The current expansion, if followed by successful commercial discoveries, could alter this equation over the medium term.

Why is Oil India’s perfect score in OALP IX a turning point?

Achieving a clean sweep in one of the most competitive upstream rounds to date highlights Oil India’s strengthened internal processes and alignment with evolving market conditions. The company not only bid smartly but also targeted high-impact basins with a mix of risk and reward.

Six of the nine blocks will be operated independently by Oil India, indicating a growing confidence in its technical and financial capabilities. The remaining three, won through consortium partnerships, allow the company to share risk while gaining access to larger or technically complex blocks.

The company’s ability to design winning bids for all blocks suggests a robust evaluation model underpinned by advanced geoscience, cost control, and project viability assessments. This performance also aligns with Oil India’s broader shift from a Northeast-centric explorer to a more diversified national player.

How does the deep and ultra-deep offshore expansion elevate Oil India’s profile?

More than 47,000 square kilometres of the newly acquired acreage lies in deep and ultra-deep offshore zones. These areas are typically high-risk, high-capital, and high-reward zones, requiring advanced subsurface imaging, platform design, and remote operations.

By stepping into this space, Oil India is expanding its upstream frontier beyond the onshore and shallow offshore projects that have historically defined its portfolio. The move brings the company closer to the exploration footprints of global giants and national peers like Oil and Natural Gas Corporation (ONGC).

This development also supports India’s longer-term goal of tapping offshore hydrocarbon reserves to reduce import dependency. As natural gas becomes a critical transition fuel in India’s decarbonisation roadmap, deepwater exploration can unlock reserves that bolster energy security and regional energy balancing.

What makes the Cambay Basin and Meghalaya debuts strategically important?

For the first time, Oil India has acquired acreage in the Cambay Basin — one of India’s most historically productive onshore basins located in Gujarat. This represents a move into geologically mature territory where cost-effective drilling and faster production tie-ups are feasible.

Equally important is the company’s debut in Meghalaya, a state with minimal commercial hydrocarbon activity to date. This signals a strong push into underexplored terrain with potential for long-term discoveries. These two additions expand Oil India’s regional footprint and reduce its historical concentration in Assam and Arunachal Pradesh.

From a policy perspective, these expansions are aligned with national energy reforms that prioritise unlocking new basins, de-bottlenecking approvals, and attracting investments to India’s North-East and Western regions.

How do recent policy reforms drive Oil India’s exploration growth?

The company’s successful bid strategy and acreage gains are strongly supported by the Government of India’s ongoing reforms under the Hydrocarbon Exploration and Licensing Policy (HELP) and broader Ease of Doing Business initiatives.

HELP has replaced previous licensing regimes with open acreage bidding and simplified fiscal terms, including reduced royalty rates, revenue-sharing contracts, and unified licensing for multiple hydrocarbon types. These incentives have made it financially viable to invest in new and challenging exploration zones.

Additionally, the Centre’s move to unlock previously restricted ‘No-Go’ areas has expanded the sedimentary basin coverage by over 200,000 square kilometres in the last five years. This allows companies like Oil India to tap into high-potential but technically difficult basins with greater operational freedom and regulatory clarity.

What is the outlook for Oil India’s strategic transformation?

Oil India’s aggressive push under OALP IX positions it as a stronger force in India’s upstream oil and gas sector. The expansion reinforces its ambition to transition from a regionally focused operator to a nationally diversified energy company with deepwater credentials.

This shift is expected to trigger a new wave of capex cycles, drilling campaigns, and strategic collaborations with global service providers. In the longer term, Oil India could consider farm-in or technology partnerships to accelerate development timelines, particularly in offshore zones where technical execution risks remain high.

The next strategic test will lie in the speed and efficiency with which the company translates this exploration acreage into proven reserves and commercial production. Investor focus will also remain on how capital is deployed across these new assets and what impact it has on financial metrics like reserve replacement ratio (RRR), earnings per share (EPS), and return on capital employed (ROCE).

In an era of rising geopolitical energy risks, domestic capacity-building and exploration excellence are non-negotiable. Oil India’s performance in OALP IX is a clear signal that it is ready to lead India’s upstream resurgence