Oil India ↗

OIL was established in 1889 as Burma Oil Company (BOC) with the first discovery of crude oil in Digboi, Assam. In 1981, it became a wholly owned GoI enterprise and came out with an IPO in 2009, where GoI holds 56.66% equity stake as on June 30, 2025. OIL is engaged in exploration, development, and production of crude oil and natural gas, transportation of crude oil and natural gas, and production of LPG. It continues to be of strategic importance to GoI in the Indian energy sector to cater energ

OIL is the largest player in north-east India. The company contributed ~13% of India’s total crude oil production and ~9% of India’s natural gas production in FY25 (FY refers to April 01 to March 31).The company had crude oil and natural gas domestic reserves (2P) of 69.39 million metric tonnes (MMT) and 139.03 billion cubic metres (BCM), respectively, as on March 31, 2025. OIL’s domestic acreage increased significantly to 92,888 square km by end-FY25 from 58,564 sq km by end-FY24 owing to

OIL has been able to develop a robust infrastructure and an in-house expertise in its long track record of operations of over six decades, providing it an advantage over newer players in the industry. OIL has developed significant onshore and offshore production facilities, subsea and land pipelines, gas processing, drilling and work-over rigs, storage facilities and other infrastructure throughout the principal oil and gas-producing regions of India. In FY25, the company drilled 57 wells (22

From an E&P player, OIL has gradually expanded its operations in refining and petrochemicals, making its presence across the hydrocarbon value chain. In the downstream operations, the company has 69.63% stake in NRL, which operates a 3 million metric tonnes per annum (MMTPA) refinery, which is being expanded to 9 MMTPA, in Numaligarh (Assam). In the transportation segment, OIL has 1,247 km long crude transportation pipeline of 9.6 MMTPA and 654 km long product

OIL’s production and sales volumes witnessed sustained growth backed by cumulative drilling of 237 wells from FY21-FY25. The company production of oil & gas grew by 2.5% y-o-y to 6.71 million metric tonne oil equivalent (MMToE) in FY25. Despite such increase in volumes, scale of operations stood stable at ₹32,527 crore in FY25 owing to lower crude and stable natural gas realisations, while profit before interest, lease rentals, depreciation and taxation (PBILDT) margin remained healthy at 41.86%

OIL’s comfortable financial risk profile is marked by an overall gearing of 0.57x as on March 31, 2025 (March 31, 2024 – 0.46x), and total debt/PBILDT of 2.24x in FY25 (FY24: 1.69x). Decline in profitability and increase in debt for funding the ongoing expansion of NRL led to moderation in the total debt/PBILDT. The company is expected to fund the routine E&P capex through internal accruals, whereas capex of ~₹41,132 crore for refinery expansion and polypropene plant is expected to be funded in

E&P business is a highly capital -intensive business with long gestation period. E&P players need to incur substantial capex for activities such as topographical surveys, geologic studies, geophysical and seismic surveys, exploratory drilling, developmen tal drilling and setting up of processing infrastructure. E&P business’s risk primarily arises from uncertainty associated with d iscovery of oil and gas after undertaking these activities. Further, OIL has ten international projects over seven

OIL needs to incur substantial routine capex in E&P business, whereas returns from the capex incurred is staggered over a longer period. The company incurred E&P capex of ~₹7,201 crore in FY25 (FY24: ~₹5,900 crore), which was largely funded through internal accruals. The company plans to achieve the target of 4 MMTPA crude oil and 5 BCMPA natural gas production in the next three years. OIL’s E&P capex intensity is expected to remain in line with FY25 going forward with envisaged spending of ~₹20

GoI’s policy with respect to, pricing of domestically produced natural gas through APM mechanism, prioritisation of customers and differential pricing for natural gas and levy of royalty and cess on production of crude oil and natural gas, have significant bearing on the company’s cash flows. GoI’s control on allocation of blocks, approval of development plan of discovered fields, monitoring minimum performance obligations and levy of penalties in case of non-compliance among others, substantial