Part III of V | India’s Energy Security Series
India’s energy backbone is not collapsing. But it is ageing faster than it is being replaced.
Mumbai: For decades, India’s public sector energy companies were seen not merely as commercial enterprises, but as strategic institutions. They drilled where private players would not go, invested where returns were uncertain, and carried the burden of ensuring energy supply for a growing nation. Among them, ONGC became the symbol of India’s domestic energy ambitions.
The discovery of Mumbai High in the 1970s transformed India’s energy landscape. It reduced import dependence, strengthened domestic production, and gave policymakers confidence that India could build a stronger level of energy self-reliance. For years, Mumbai High remained the backbone of India’s crude production. But every oil field has a lifecycle.
Today, nearly five decades later, Mumbai High is no longer the giant it once was. Production has steadily declined as the field matured. This is not unusual in the global energy industry. Mature fields across the world naturally decline over time. The real challenge is whether new discoveries and new production capacities are being built fast enough to replace them. That is where India’s discomfort begins.
Despite technological improvements, policy reforms, and decades of exploration activity, India has not discovered another Mumbai High-scale asset capable of fundamentally changing its energy balance. Domestic crude production has continued to decline even as national demand has surged. Government data itself reflects this trend. India’s crude oil production has fallen steadily over recent years, while import dependence has climbed close to 90 per cent. Public sector companies continue to dominate domestic production, but they are increasingly operating through ageing fields with declining output profiles.
This creates a structural imbalance. India’s energy demand belongs to a rapidly growing economy. But a significant part of its domestic production infrastructure belongs to another era. This does not mean India’s PSUs have failed. That conclusion would ignore both reality and context. ONGC and Oil India operate in one of the most difficult sectors in the world. Exploration is capital-intensive, technically uncertain, and heavily dependent on geological luck. Every well drilled does not become a commercial discovery. Even successful discoveries may take years before meaningful production begins.
The problem is deeper than institutional efficiency. India’s upstream energy ecosystem itself has struggled to generate the scale of new discoveries required to offset decline in legacy assets. Existing fields continue to age faster than new capacities emerge. The challenge becomes more complicated offshore. Deepwater exploration requires advanced technology, massive investment, and long project timelines. Public sector companies often face additional layers of procedural approvals, audits, and procurement constraints that private global energy majors may not face in the same form. At the same time, the pressure on these companies keeps increasing.
India wants affordable fuel. Consumers want price stability. Governments want energy security. Markets expect commercial returns. And all of this must be balanced while global energy transition pressures are accelerating. In effect, India’s PSUs are being asked to manage the present while simultaneously preparing for an uncertain future. The global energy landscape is also changing faster than before. Renewable energy is rising. Electric mobility is expanding. Green hydrogen is becoming part of strategic discussions. Yet fossil fuels continue to dominate actual energy consumption. Even countries aggressively promoting clean energy continue to rely heavily on oil and gas for industrial stability and economic continuity.
India is no exception. This means ONGC, Oil India, and related institutions cannot simply be viewed through a traditional “profit-loss” framework. Their role remains strategic. The real question is whether the current structure allows them to evolve fast enough for the next phase of India’s energy needs. Because energy security is no longer only about finding oil. It is about building resilience. And resilience requires adaptation.
India now faces a critical transition period. Legacy oil fields will continue declining. Import dependence may remain structurally high for years. Demand for energy will continue rising as infrastructure, manufacturing, transport, and digital systems expand. Under these conditions, maintaining the status quo is itself a risk.
The next phase of reform therefore cannot remain limited to licensing rounds and policy announcements alone. It must focus on capability expansion. Public sector energy companies require stronger technological partnerships, faster decision-making frameworks, and greater operational flexibility for high-risk exploration projects. India also needs more aggressive investment in enhanced oil recovery technologies to maximise output from ageing fields. Equally important is diversification.
India’s energy future cannot depend entirely on discovering another giant oil field. That era may already be passing globally. Instead, the country will need a broader strategy combining domestic hydrocarbons, gas infrastructure, renewables, nuclear energy, storage systems, and strategic reserves. In this framework, PSUs will remain central — but their role must evolve from being only producers to becoming long-term energy transition institutions. This is where the debate becomes larger than ONGC or Mumbai High.
The real issue is whether India is preparing its energy institutions for the next 30 years — or still relying on the successes of the previous 50. Because a nation aspiring to become a major economic power cannot indefinitely depend on ageing energy foundations while hoping global markets will remain stable forever. The challenge is not immediate collapse. The challenge is gradual vulnerability. And gradual vulnerabilities are often the most dangerous, because they become visible only after dependence has already deepened.
India’s public sector energy companies carried the country through one era. The question now is whether the system around them is ready for the next one.
Next in the Series
Part IV: Strategic Reserves and India’s Vulnerability — How Much Protection Does India Really Have?
Author Signature
Vivek Bhavsar is Editor-in-Chief of TheNews21. He writes on power, policy and the structural risks shaping India’s economic and strategic future.
