The expansion of the Numaligarh Refinery in Assam, a collaborative effort between Bharat Petroleum Corporation, Oil India, and the Assam government, is projected to finish by December 2025, according to Oil India’s senior management. Following the expansion, the refinery’s capacity is anticipated to rise to 9 million tonnes per annum from its current 3 million tonnes.
“The estimated cost of the NRL expansion is approximately Rs 28,000 crore. At present, the project is 65% complete, and we expect it to be finished by December 2025,” Oil India stated during its earnings call. “The total equity required for this project is around Rs 5,500 crore, with Oil India contributing 69% of this amount.”
The state-owned upstream company has already invested Rs 19,000 crore in the project. After expansion, the refinery will initially operate at 50-60% capacity and is expected to reach full capacity by 2026-27 as it undergoes a stabilization period. The expansion involves adding a 6 million tonnes per annum capacity refinery and associated crude oil terminals and pipelines, with plans to process Arab Light and Arab Heavy grades of crude oil.
The additional crude oil will be imported through Paradip Port in Odisha, and a cross-country pipeline of approximately 1,640 km will be constructed from Paradip Port to Numaligarh to transport 9 MMTPA of imported crude. In May 2021, the Assam government increased its stake in the refinery from 12.35% to 26%.
Oil India also reported a 6% increase in crude oil production and a 10% rise in natural gas production in the first quarter of the fiscal year. The company plans to drill 78 wells in the current fiscal year 2024-25, up from 61 wells drilled in FY24, with a goal of drilling 100 wells over the next two financial years.
Reduced gas production is attributed to sluggish demand from some consumers, including fertilizer plants, according to Pankaj Goswami, Director of Operations. Gas output is expected to rise following the completion of a pipeline connecting Oil India’s fields to the national gas grid. The first phase of this pipeline, being developed by Indradhanush Gas Grid Limited (IGGL)—a joint venture involving IOCL, ONGC, GAIL, OIL, and NRL—is expected to be completed by December this year.
“Recently, we have been discovering more gas than crude oil. In the coming year, we anticipate discovering more oil prospects,” the company noted. The success ratio for exploratory wells stands at 50-60%, while development wells have a 100% success rate, according to the management.
Oil India Limited (OIL) is a major Indian public sector company specializing in upstream oil and gas exploration and production. Established in 1959, OIL is headquartered in Duliajan, Assam. It operates across various regions in India and internationally, focusing on crude oil and natural gas exploration, production, and distribution. The company is a key player in the Indian energy sector.
