New Delhi: Oil India is moving to optimise costs as crude prices soften and are expected to remain subdued, said its chairman Ranjit Rath.
The state-run explorer has launched several cost-reduction measures, including trimming logistics expenses, streamlining manpower deployment and fast-tracking the drilling cycle, he said. With prices likely to hover around current levels, the company has stepped up efficiency drives.
The global oil market remains oversupplied, with higher output from OPEC+ producers as well as others, while demand in China, India and other key markets has been sluggish. Analysts warn of a potential glut, projecting prices could fall to $55 a barrel next year from about $67 now. Lower prices erode producers’ margins and weaken the case for developing high-cost discoveries.
Despite the downturn, Oil India has set an ambitious target of drilling 80 wells in this financial year, up from 57 last year.
Rath also said work is expected to resume at the Mozambique gas field in which Oil India holds a 4% stake. The force majeure at the project could be lifted next month, he said, adding that severe delays have already pushed up project costs by $19.6 billion.
Oil India is in talks with Total and Petrobras to collaborate on exploration technology and expertise in India, Rath said.
Meanwhile, the company’s dividends from Russian oil fields, estimated at $330 million, remain stuck overseas due to restrictions on banking channels. Oil India, which holds stakes in two Russian blocks, continues to receive dividend payouts but is unable to repatriate them.
