ONGC to Reserve Half of New Oil Storage Capacity

India has approved a proposal allowing ONGC to reserve 50% of the capacity in two new strategic crude oil storage facilities, strengthening the country's energy security while enabling the state-run producer to store domestically produced crude closer to refineries. The remaining capacity will be allocated to other domestic and international oil companies.

India has approved a proposal to allow Oil and Natural Gas Corporation (ONGC) to reserve half of the capacity in two upcoming strategic crude oil storage facilities, marking a significant step in strengthening the country's long-term energy security. The decision is expected to improve crude oil storage infrastructure while enabling India's largest upstream producer to maintain strategic reserves closer to domestic refineries and key consumption centres.

The new underground strategic petroleum reserves will be developed at Bikaner in Rajasthan and Mangalore in Karnataka, adding substantial storage capacity to India's emergency oil reserve network. Under the approved framework, ONGC will receive 50% of the storage capacity in the two facilities, while the remaining capacity will be offered to domestic and international oil companies under commercial arrangements. The approach is intended to improve utilisation of the infrastructure while attracting broader industry participation.

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The expansion forms part of India's broader strategy to increase its strategic petroleum reserves amid rising global energy uncertainties and geopolitical risks. As one of the world's largest crude oil importers, India relies on overseas supplies for more than 85% of its crude oil requirements, making adequate emergency storage essential for ensuring energy security during supply disruptions or periods of extreme price volatility.

Allowing ONGC to utilise part of the strategic storage capacity is expected to improve operational flexibility by enabling the company to store domestically produced crude closer to refining centres. The arrangement is also likely to reduce transportation costs and support more efficient management of crude supplies while ensuring that strategic infrastructure remains commercially viable through shared utilisation.

India currently operates strategic petroleum reserve facilities at Visakhapatnam, Mangaluru, and Padur, managed by Indian Strategic Petroleum Reserves. The new projects represent the next phase of capacity expansion aimed at improving the country's preparedness for global supply disruptions. The government has also explored partnerships with foreign energy companies to maximise utilisation of strategic storage infrastructure while strengthening international energy cooperation.

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The decision to allocate half of the new storage capacity to ONGC reflects India's balanced approach to enhancing energy resilience while promoting efficient use of strategic assets. By expanding crude oil storage capacity and integrating commercial participation with national security objectives, the initiative is expected to reinforce the country's long-term energy preparedness and support stable crude oil supply management in an increasingly uncertain global market.