Oil India’s Energy Play: Traditional Fuels to Renewables
Jan 16, 2026
AdvisorAlpha
Oil India at a Glance
Established in 1959, Oil India Limited (OIL) stands as one of the country’s oldest and most vital entities in the oil and natural gas industry. As the second-largest national upstream oil and gas company in India, OIL plays a pivotal role in ensuring the nation’s energy security. With decades of experience in oil exploration, production, and hydrocarbon logistics, the company is deeply embedded in the structural foundation of India’s energy sector.
Headquartered in Duliajan, Assam, Oil India Ltd is a Navratna Public Sector Undertaking (PSU) under the Ministry of Petroleum and Natural Gas. Its operations extend across India and internationally, including assets in countries like Russia, Mozambique, Libya, Nigeria, and the U.S.
At a time when India’s energy demand is expected to grow at a compound annual growth rate (CAGR) of nearly 4% through 2040 — one of the fastest globally — Oil India’s legacy and strategic initiatives place it at the core of both traditional fossil fuel supply and the country’s emerging clean energy investments.
Business Overview: Exploring the Core of Oil India
Oil India operates primarily in the upstream segment of the energy value chain. This includes the exploration, development, and production of crude oil and natural gas, along with the transportation of these hydrocarbons through its extensive pipeline network. The company also has growing interests in renewable energy initiatives and petrochemicals.
Core Business Segments:
Exploration and Production (E&P):
OIL holds over 50 exploration and production blocks across India, with key assets in Assam, Arunachal Pradesh, Rajasthan, and offshore regions. The company produced over 3.1 million metric tonnes (MMT) of crude oil and around 3.2 billion cubic meters (BCM) of natural gas in FY 2022–23, contributing significantly to oil production in India.Hydrocarbon Transportation:
Oil India operates a vast crude oil pipeline network that stretches more than 1,500 km — one of the longest in Asia — linking oilfields in the Northeast with refineries in Assam and West Bengal.Overseas Ventures:
Through its subsidiary, OIL India International Pte Ltd, the company holds equity in several global assets, including Russia’s Vankorneft project and Mozambique’s Rovuma LNG project, diversifying both revenue streams and energy sources.Refining and Marketing (via Stakeholding):
Oil India also owns a stake in Numaligarh Refinery Limited (NRL), enhancing its integration within the energy supply chain and offering better margins through forward linkage.Renewable Energy Initiatives:
In line with global and national mandates on decarbonization, OIL has begun significant investments in solar and wind power, with more than 188 MW of renewable energy capacity already installed. It has also ventured into green hydrogen pilot projects, aligning with India’s National Green Hydrogen Mission.
Through its balanced portfolio of fossil fuel assets and emerging clean technologies, Oil India Ltd demonstrates a business model that addresses both current energy needs and the long-term energy transition agenda.
Oil India Share Price & Financial Performance
Share Price Trends
Oil India Limited's share price has experienced fluctuations over the past year. As of April 4, 2025, the stock closed at ₹357.75 on the National Stock Exchange (NSE), marking a 7.3% decline from the previous close of ₹386.0. Over a one-year period, the stock has seen a decrease of approximately 13.69%, while over a three-year span, it has appreciated by about 126.28%.
Financial Performance
In the third quarter of the fiscal year 2024–25 (ending December 31, 2024), Oil India reported a net profit of ₹1,338.85 crore, down from ₹2,347.12 crore in the same quarter of the previous year. Revenue from operations for Q3 FY2024–25 stood at ₹8,639.01 crore, compared to ₹10,251.02 crore in Q3 FY2023–24.
For the nine months ending December 31, 2024, the company achieved a crude oil production of 2.614 million tonnes (MT), reflecting a 4.10% increase compared to 2.511 MT in the corresponding period of the previous year.
Market Capitalization and Shareholder Interest
As of March 2025, Oil India Limited's market capitalization was approximately ₹58,192 crore. The company's earnings per share (EPS) stood at ₹45.34 as of April 4, 2025. The stock's price-to-earnings (P/E) ratio was 6.89, and the price-to-book (P/B) ratio was 1.20, indicating a potentially attractive valuation for investors.
Renewable Energy Initiatives
Oil India Limited is actively diversifying its energy portfolio by investing in renewable energy sources, aligning with India's broader energy transition goals.
Investments in Renewable Energy
The company has established a subsidiary, Oil Green Energy, to manage its green and alternative energy projects. As of January 2025, Oil India had an installed renewable energy capacity of 188.1 MW, comprising 174.1 MW of wind power and 14 MW of solar power, with projects located in Rajasthan, Gujarat, and Assam.
Green Hydrogen Initiatives
In line with the National Green Hydrogen Mission, Oil India has initiated green hydrogen production projects. Notably, the company is setting up a 100 kW green hydrogen plant at its Jorhat facility in Assam, utilizing AEM technology.
Role in India's Energy Transition
By investing in renewable energy and green hydrogen, Oil India is contributing to India's goal of reducing carbon emissions and promoting sustainable energy solutions. The establishment of Oil Green Energy underscores the company's commitment to balancing its traditional fossil fuel operations with clean energy initiatives.
Oil and Natural Gas Market Context
Global Trends
The global oil and natural gas industry is experiencing a period of transformation, influenced by fluctuating crude oil prices, geopolitical tensions, and the accelerating shift towards renewable energy sources. The International Energy Agency (IEA) projects that, despite a slowdown in growth, global oil demand will be 3.2 million barrels per day higher in 2030 than in 2023, driven primarily by emerging economies in Asia.
Indian Market Dynamics
India's energy landscape is characterized by a growing demand for oil and natural gas, driven by rapid economic development and urbanization. The IEA forecasts that India will become the largest source of global oil demand growth between now and 2030. To meet this rising demand, India has been reforming regulations and inviting foreign oil companies to explore onshore and offshore oil fields, aiming to maximize domestic production before the global shift to renewable energy intensifies.
Impact on Oil India Limited
As a key player in India's upstream oil and gas sector, Oil India Limited is directly influenced by these market dynamics. Fluctuations in crude oil prices and geopolitical factors can significantly impact the company's revenue and profitability. For instance, global supply-demand imbalances or geopolitical tensions affecting oil-producing regions can lead to price volatility, influencing OIL's financial performance. Additionally, India's heavy reliance on imported crude oil—accounting for nearly 90% of consumption between April and December 2024—underscores the importance of enhancing domestic production, a goal that aligns with OIL's strategic initiatives.
Key Milestones & Strategic Outlook
Major Developments
Oil India Limited has achieved several significant milestones that underscore its commitment to growth and innovation:
Expansion in Rajasthan: OIL has significantly expanded its operational footprint in the state of Rajasthan, commencing exploration in the Thar Desert in the early 1980s.
Technological Innovations: The company has been pioneering the use of advanced technologies in its upstream and midstream activities, including Enhanced Oil Recovery (EOR) techniques, digitalization, and artificial intelligence (AI) to optimize exploration and production processes.
Future Plans
Looking ahead, Oil India Limited has outlined strategic plans focusing on exploration, renewable energy, and capacity expansion:
Exploration and Production: The company aims to increase its crude oil production to over 4 million metric tonnes (MMT) within the year 2023-24, contributing to India's goal of reducing crude oil imports.
Renewable Energy Focus: OIL is committed to achieving net-zero Scope 1 and 2 emissions by 2040 through strategic energy efficiency measures and investment in renewables. The company plans to expand its renewable energy capacity to 5-5.5 GW by 2040, advancing projects in green hydrogen, biofuels, and carbon capture.
Strategic Partnerships: In November 2024, OIL signed a cooperation agreement with TotalEnergies to carry out methane emissions detection and measurement campaigns using advanced technology, reflecting its commitment to environmental sustainability.
These strategic initiatives position Oil India Limited to navigate the evolving energy landscape effectively, balancing its traditional fossil fuel operations with a forward-looking approach to renewable energy and sustainability.
Conclusion: Oil India’s Roadmap
Oil India Limited (OIL) stands at a crucial juncture in India’s energy evolution. As the nation's second-largest national oil and gas company, OIL plays a foundational role in securing India’s energy independence, managing vital upstream operations across key oil-producing states like Assam and Rajasthan. Its core strength lies in decades of expertise in oil and natural gas exploration, production, and transportation, placing it at the heart of India's hydrocarbon ecosystem.
But what makes Oil India particularly noteworthy today is its strategic foresight. While continuing to fuel India’s growth through traditional fossil fuels, the company is boldly stepping into the renewable energy space—investing in wind, solar, and green hydrogen. Through initiatives like the establishment of its subsidiary Oil Green Energy and collaborations with global leaders like TotalEnergies, OIL is aligning itself with India’s 2070 net-zero carbon vision.
As global and domestic energy markets transition toward sustainability, Oil India’s ability to balance energy security with green innovation will define its future. For stakeholders, analysts, and energy enthusiasts, Oil India’s journey offers a compelling case study in how legacy oil and gas companies can remain relevant—and even thrive—in a rapidly decarbonizing world.
In the coming years, watching Oil India evolve will be pivotal to understanding India’s own path to energy resilience and environmental responsibility.
