August 19, 2026: Oil and Natural Gas Corporation (ONGC) has raised its long-run oil price expectation to above USD 75 a barrel from an earlier consensus of around USD 65, and says the shift has brought fields it had written off back into viable territory, Anupam Agarwal, Director (Finance), ONGC, said on the company's Q1 FY2026-27 earnings call.

Before Hormuz, the general consensus was coming that oil prices will settle down around USD 65," Agarwal said. "But now with this Hormuz crisis, there's a security layer which is coming on the baseline, and we believe it will be USD 75 plus in the long run. That is our expectation."

He linked the revision directly to the company's investment set.

"With that, many of the fields which we thought might not be viable are working out in the range where they are viable, and we will like to develop them for the energy security for the country," he said.

Deepwater economics recalculated

Agarwal applied the same logic to deepwater, where he said the size of the reservoir has to justify the cost of development. "Deepwater is a high-risk, high-reward game," he said. "The size of reservoir, the economics has to be good to develop that."

Some prospects that did not clear the bar at lower prices now do, he said. "At USD 75-plus kind of thing, that will be continuing to be very, very lucrative also and important for energy security."

He placed the government's recent upstream measures in the same frame. "This is basically recognition by the government as well as by ONGC post Hormuz, the need of energy security for the country," he said, citing fiscal stability assurances, benefits under the Oil and Gas Act and the new gas pricing regime.

Each deepwater exploratory well costs between Rs 8 billion and Rs 10 billion, or about USD 100 million, Agarwal said.

ONGC commenced drilling its first deepwater exploratory well in the Mahanadi Offshore Basin under the Samudra Manthan programme during the quarter. Agarwal said the well was spudded around July 25 and that a deepwater exploration well takes about three months to drill, putting results towards the end of September.

The Union Cabinet approved Samudra Manthan, the National Offshore Exploration Scheme, on July 31 with an outlay of Rs 840.84 billion for implementation up to FY2030-31.

(Source: PSU watch)