Shares of Oil and Natural Gas Corporation rose sharply on Wednesday, January 28, after the state-run oil major announced a resource-sharing agreement with Reliance Industries Ltd for deepwater offshore exploration and production operations on India’s east coast.
ONGC informed stock exchanges that the agreement will focus on complex offshore projects, particularly in the Krishna Godavari Basin and the Andaman offshore region. The company said the collaboration is aimed at reducing costs, speeding up project execution and improving the use of high-value assets required for deepwater operations.
Following the announcement, ONGC shares were trading about 7.6% higher around midday, while Reliance Industries shares gained around 1.4%.
What the ONGC–Reliance agreement covers
Under the agreement, ONGC and Reliance will explore the sharing of key infrastructure and operational resources needed for offshore oil and gas production. These include onshore and offshore processing facilities, drilling rigs, marine vessels, pipelines, power infrastructure, and specialised services such as logging and well operations.
Deepwater exploration is capital-intensive and depends on limited, high-cost equipment. By pooling resources, both companies aim to avoid duplication, reduce idle capacity and improve operational efficiency in challenging offshore environments.
ONGC said the arrangement will be implemented through a structured framework that allows both companies to access critical assets when needed, without compromising operational control or safety standards.
Policy support under Oilfields Amendment Act
ONGC highlighted that the agreement is aligned with the policy framework created by the Oilfields Amendment Act, which was introduced by the Ministry of Petroleum and Natural Gas earlier this year.
The amended law enables oil and gas operators to share infrastructure and facilities—both onshore and offshore—to make the development of oilfields and hydrocarbon production more efficient. Industry participants have long sought such a framework, especially for offshore and deepwater projects where costs and technical risks are high.
According to ONGC, the ministry’s initiative provides regulatory clarity and legal backing for cooperation between operators, making large-scale collaborations more viable.
Expected benefits from the collaboration
ONGC said the agreement is expected to deliver measurable operational and financial benefits. Key gains include cost savings through the shared use of expensive rigs, vessels, logistics systems and specialised subsea equipment. Improved resource utilisation is another major benefit, as shared infrastructure can help reduce idle time and duplication across operators.
The company also expects faster mobilisation and execution of projects, as access to scarce deepwater services and equipment can often delay operations. In addition, ONGC noted that shared emergency response systems and training capabilities could strengthen safety and operational resilience in offshore environments.
Why the market reacted positively
Investors appear to have welcomed the move, viewing it as a practical step to improve efficiency in one of the most challenging segments of India’s energy sector. Deepwater projects typically involve long development timelines and high upfront investments, making cost optimisation critical for profitability.
The agreement also signals a more collaborative approach within India’s upstream oil and gas industry, backed by recent regulatory changes. Analysts say such partnerships could become more common as companies look to balance capital discipline with the need to boost domestic energy production.
What happens next
ONGC said further details on implementation will emerge as specific projects are identified for resource sharing. Both companies are expected to evaluate opportunities on a case-by-case basis, depending on operational needs and asset availability.
For the broader sector, the deal may serve as a template for future collaborations, especially as India pushes to increase hydrocarbon output while managing costs and risks in offshore exploration.