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Oil India
Our verdict on Oil India isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Drilling plan for high potential areas like Barekuri and Sesabil. — target: 15 wells in Barekuri, 3-4 wells in Sesabil
“Specifically, in Barekuri, we are going to drill around 15 more wells in coming days. And in Sesabil, we are planning for another 3, 4 wells.”
Target to reach 4 million ton crude oil production and 5 BCM gas production. — target: 4 MMT oil and 5 BCM gas (+1 more commitment)
“Our target is to become a 4 million ton crude oil and a 5 BCM company, so that's our target... We will reach that 4 million ton target by the year '27.”
See the full cited Management analysis of Oil India
How durable is the business?
Crude oil production grew by 5.76% YoY to 3.359 MMT, the highest in recent years, driven by enhanced recovery techniques and new discoveries. (2 expanding across 1 engine)
“the company has continued to improve its crude oil production, which is higher by 1.4 percentage in quarter ended 31st December 2024 as 0.868 MMT vis-a-vis 0.856 MMT in quarter ended 31st December 2023.”
Natural gas production reached an all-time high of 3,182 MMSCM, though revenue was impacted by lower price realizations. (2 expanding across 1 engine)
“Natural gas production for quarter ended 31st December 2024 is marginally higher by 0.85 percentage at 0.829 BCM vis-a-vis 0.822 BCM for quarter ended 31st December 2023.”
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Where does growth come from?
Management has reaffirmed 'Mission 4' (4 MMT oil) and 'Mission 5' (5 BCM gas) targets for FY27, noting that while FY25 targets are slightly lower (3.5 MMT oil), new drilling areas like Barekuri and Sesabil are expected to accelerate growth toward the long-term goal. (1 accelerating across 1 signal)
“Our target is to become a 4 million ton crude oil and a 5 BCM company, so that's our target... We will reach that 4 million ton target by the year '27.”
The company is aggressively expanding its exploration footprint, with acreage expected to nearly double from current levels following the award of OALP Round IX blocks. (1 accelerating across 1 signal, 1 leading indicator)
“over the past 4, 5 years, we have increased our exploration acreage by six to sevenfold... Our acreage will go up to more than 1 lakh square kilometers.”
See the full cited Future Growth analysis of Oil India
What could break the thesis?
The risk is stable but remains a significant factor. Crude oil price realization decreased from USD 95.47/bbl to USD 83.03/bbl (a 13% drop), leading to a marginal decrease in crude oil revenue despite higher production volumes. (1 stable, 1 high-severity)
“average crude oil price valuation for Q3 financial year 2025 is $73.82/ barrel vis-a-vis $84.14 per barrel for financial year '24, which decreased by 12.27% for 9 months ended 31st December 2024.”
The risk is easing as the company achieved its highest ever total oil and gas production of 6.541 MMTOE. Crude oil production grew by 5.76% year-on-year, and natural gas production reached an all-time high, successfully arresting the decline from mature fields. (2 easing, 1 high-severity)
“However, as you have seen that there are huge challenges. Our fields are all depleting fields.”
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