India Oil And Gas Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

India Oil And Gas Market Trends and Insights

Tightening Domestic E&P Licensing Rounds

The Open Acreage Licensing Policy (OALP) has unlocked 1 million km² of sedimentary basins, switching from cost-recovery to revenue-sharing terms that shorten cash-flow breakevens and encourage frontier drilling. Since 2018, nine bid rounds have attracted interest in the Andaman-Nicobar deepwater area, and the revised contractual structure now permits continuous acreage nomination, thereby accelerating work-program approvals.^{[1]Directorate General of Hydrocarbons, “OALP Bid Round Status 2025,” Directorate General of Hydrocarbons, dghindia.org} Early discoveries, such as Suryamani (4 MMT) and Neelmani (1.2 MMT), illustrate the upside potential, while a sharper focus on seismic acquisition is channeling digital subsurface imaging into exploration workflows. As India oil and gas industry participants appraise these prospects, priority is shifting toward multi-client data libraries and consortia-based drilling campaigns that spread risk and expedite evaluation timelines. Cumulatively, the licensing recalibration is expected to lift domestic crude output and shave import bills over the medium term.

Surge in Gas-Based Industrial Clusters

State-backed petrochemical and steel corridors built around affordable natural-gas feedstock are reinforcing industrial competitiveness in Gujarat, Maharashtra, and Odisha. The Dahej Petroleum, Chemicals, and Petrochemicals Investment Region spans approximately 453 km² and features integrated logistics, port, and utility networks that reduce delivered gas costs by up to 15% compared to stand-alone plants.[2] Cluster operators benefit from shared pipeline laterals, common effluent treatment, and captive cogeneration, which together enhance energy-intensity metrics and shrink scope-1 emissions. With natural gas still representing only 7.5% of India’s primary energy mix, these hubs offer anchor demand that underwrites upstream final-investment decisions in the India oil and gas industry. Their long payback horizons align closely with policy ambitions to extend gas’s share to 15% by 2030, supporting multi-client LNG regasification projects and spur lines.

Expansion of City-Gas Distribution Networks

The Petroleum & Natural Gas Regulatory Board has auctioned 228 geographical areas since 2018, covering about 98% of India’s population. Licence holders must roll out 17,500 CNG stations and connect 120 million households to piped natural gas by 2030.^{[3]Petroleum & Natural Gas Regulatory Board, “CGD Network Authorisations,” PNGRB, pngrb.gov.in} Advance allocation reforms guarantee two-quarter gas volumes for transport and domestic customers, boosting cash-flow visibility and curbing demand-supply mismatches during peak winter pulls. Increasing CNG penetration is also central to clean-air policies in tier-2 cities, where municipal bus fleets are converting from diesel, driving new investments in compression and dispensing. For the India oil and gas industry, widening distribution grids mitigate single-buyer risk and diversify end-user profiles, reinforcing earnings stability for midstream companies.

Rising Private Investments in Refinery Upgrades

Reliance Industries’ Jamnagar complex demonstrates how crude-to-chemicals integration can enhance product yields and decarbonize marginal barrels in the India oil and gas industry. Private refiners are earmarking more than INR 2 trillion (USD 24 billion) for residue-upgrading, petrochemical annexes, and energy-efficiency retrofits through 2030.^{[4]Reliance Industries Ltd, “Annual Report 2024-25,” Reliance Industries Ltd, ril.com} Bharat Petroleum and Hindustan Petroleum have separately announced greenfield and brownfield projects totalling 18 MMTPA of new capacity, incorporating carbon-capture-ready furnaces and advanced process controls. These moves align with fuel-spec harmonization, IMO sulfur caps, and the gradual shift from gasoline and diesel toward polymers, lubricants, and specialty chemicals. Higher complexity indices are widening gross refining margins and fostering technology-transfer alliances with global licensors.

ESG-Driven Capital Flight from Fossil Assets

Sovereign wealth funds and multilateral lenders are tightening screening criteria, redirecting portfolios toward renewable and low-carbon projects. Indian NOCs now face a higher weighted-average cost of capital, which lengthens the payback horizons for greenfield oil investments, forcing a pivot toward self-financing and backing from export credit agencies. Bond investors are increasingly requesting science-based emission-reduction targets, and failing to meet these can result in coupon spreads being inflated by 50-75 basis points. As a result, the India oil and gas industry is witnessing selective deferment of marginal fields, while capital is being ring-fenced for quick-cycle, tie-back projects or value-accretive midstream assets with regulated returns. The financing squeeze simultaneously accelerates the adoption of methane capture and carbon intensity metrics, reflecting a broader shift toward performance-linked instruments.

Slow Land-Acquisition for Trunk Pipelines Constrains Infrastructure Development

The Mundra-Panipat crude link illustrates protracted clearances that can delay multi-state lines by up to three years in the India oil and gas industry. India operates 16,000 km of product and gas trunk pipelines, with an additional 13,000 km under construction. In contrast, China’s grid exceeds 42,000 km, underscoring India’s physical connectivity gap. Seasonal dislocations at Dabhol, unconnected pipelines at Kochi, and under-utilized Ennore LNG terminals highlight how land constraints impede gas-pricing convergence.

Segment Analysis

By Sector: India Intensifies Upstream While Downstream Accelerates Value-Addition

The upstream segment captured a 68.8% share of the India oil and gas industry in 2024, as the government pursues energy self-reliance; however, its forecasted CAGR trails the downstream's 5.2% through 2030. Ongoing OALP rounds and fiscal incentives keep drilling levels elevated; however, the maturation of legacy fields drives a strategic pivot toward petrochemicals, where domestic demand grows at an annual rate of 8%. State-run operators collectively spent INR 1.28 trillion on capital expenditure (capex) in FY 2024, with ONGC drilling new high-pressure, high-temperature wells and Indian Oil advancing five refinery-cum-cracker complexes. The downstream boom is redefining the size allocation of India's oil and gas market, pulling capital into polymers, aromatics, and specialty chemicals that can yield stable margins. Regulatory clarity over product pricing and logistics infrastructure dovetails with ambitions to become a net petrochemical exporter.

Second-order effects ripple into midstream. Indian Oil's INR 9,028 crore Mundra-Panipat crude line and the INR 6,025 crore Ennore–Thiruvallur–Bengaluru gas line illustrate how pipeline densification bridges import hubs with inland demand clusters. These backbones unlock latent refinery output and LNG regasification, thereby reinforcing India's growth corridors in the oil and gas market while underscoring broader momentum.

Note: Segment shares of all individual segments available upon report purchase

By Location: Offshore Momentum Narrows the Historic Onshore Gap

Onshore operations retained a 61.3% stake in the India oil and gas industry in 2024, anchored in Gujarat, Assam, and Rajasthan. Yet offshore output climbed 6.9% CAGR on the back of deep-water discoveries in KG-DWN-98/2 and the redevelopment of Mumbai High. Offshore now contributes 53% of national crude, with Western Offshore alone supplying 43%. The tenth OALP cycle allocates 133,724 square kilometers of deep and ultra-deep acreage, courting global players equipped with subsea and high-pressure technologies. Drilling programs plan to drill over 90 high-spec wells by 2030, backed by multipurpose floating production systems designed to withstand monsoon downtime.

Onshore fields experience natural decline, but they compensate through enhanced oil recovery and debottlenecking. Oil India's AI-guided steam cycles extend field life, while polymer flooding pilots aim to lift sweep efficiency by up to 12 percentage points. The location dynamic shows India’s oil and gas market share gradually tilting to offshore, yet onshore remains indispensable for quick-cycle barrels and gas that feed proximal industries in the India oil and gas industry.

By Service: Construction Dominates but Maintenance Leads Growth Curve

Construction services accounted for 47.5% of India's oil and gas market size in 2024, as projects such as brownfield debottlenecking, new LNG jetties, and long-distance pipelines progressed. However, maintenance and turnaround work is forecast to expand at a 7.8% CAGR, reflecting a maturing asset base. India’s first offshore decommissioning project, the Tapti field campaign, set regulatory templates for plug-and-abandonment, topside removal, and materials recycling. L&T and domestic yards completed the lift and dismantle scopes locally, signaling that a home-grown decommissioning supply chain is forming in the India oil and gas market.

Digital maintenance elevates service intensity. Chevron's Bengaluru hub now supports global turnaround planning with Primavera and Power BI analytics, underscoring India's positioning as a cost-effective center for asset-integrity engineering. Real-time corrosion and vibration monitoring platforms are being retrofitted across 300 km of pipelines and 90 process units nationwide, enabling a shift from reactive to predictive maintenance. As a result, maintenance revenues will rise faster than construction, narrowing the historic gap by the end of the decade in the India oil and gas industry.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Western Offshore remains the cornerstone of India's oil and gas market, accounting for 43% of the nation's crude production in 2024. Mature fields, such as Mumbai High, continue to benefit from infill drilling and water-injection optimization, while nearby Cluster-7 tie-backs leverage existing processing hubs to minimize capital expenditures (capex). Gujarat's coastal belt exemplifies integrated infrastructure, where LNG imports via Dahej and Hazira supply both petrochemical complexes and account for a 32% share of national gas consumption, despite the state producing only 10% of its domestic gas. This concentration underscores how regas capacity and transmission grids dictate regional demand elasticity in the India oil and gas market.

The eastern seaboard is fast catching up. ONGC's KG-DWN-98/2 project aims to achieve a plateau gas of 10 MMSCMD and 40,000 B/D of oil by 2026, benefiting from a USD 5 billion subsea tie-in and dual-floaters design. Cairn's adjacent deep-water block plans 3,600 sq km of 3D CSEM surveys ahead of 2026 drilling, targeting multi-TCF gas. Pipeline connectivity is improving through Indian Oil's Ennore–Bengaluru line, which will unlock latent LNG imports at Ennore by extending the grid to Karnataka and Andhra Pradesh markets.

Northern India hosts the downstream heavyweights. The Panipat refinery expansion to 25 MMTPA secures feed via the Mundra-Panipat crude line, which spans desert terrain and multiple state jurisdictions. Regulatory harmonization under the Petroleum and Minerals Pipelines Act streamlines right-of-way acquisition, yet it still faces local holdouts. Assam and Rajasthan onshore blocks utilize digital oil-field suites to mitigate declines, achieving a 40–60% uplift after steam stimulation cycles in the India oil and gas market.

Regional policy heterogeneity influences investment pacing. Gujarat's early adoption of PNGRB-regulated city-gas licenses accelerated network density, while land-locked states still finalize harmonized compensation norms. Basin classification under the Hydrocarbon Exploration and Licensing Policy now guides fiscal terms; Category-III basins in the Andaman Sea and Kerala-Konkan offer profit-sharing relief to attract high-risk capital, a move expected to broaden India's oil and gas market participation beyond the traditional onshore centers.