OREANDA-NEWS. August 30, 2011. State-run Navaratna oil explorer Oil India is chalking out an expansion and diversification strategy that could also include an entry into the city gas distribution space.

"We plan to pursue a cautious strategy for our exploration initiative. We are looking for sure-bets, because exploration is a risky activity. Even when it comes to domestic exploration, we intend to bid for the next Nelp auctions very selectively," Oil India Director for Exploration & Development Baikunta Nath Talukdar said.

The company is considering entering the gas transportation market, since it already has expertise in laying pipelines and transporting gas through pipelines. "We would like to market our gas directly to consumers. We may tie-up with a gas marketing company for this," Talukdar said.

"City gas distribution and piped gas distribution are potential areas which we have been identified for diversification. That apart, we also intend to tap shale gas, since the price of natural gas is rising," Talukdar said. With respect to overseas exploration ventures, the company plans to focus its efforts on fields that have already been discovered.

 Earlier, the company had set aside 40 per cent of its surplus funds for exploration initiatives. Now, that figure has risen to 52 per cent. Oil India also intends to improve recovery from existing oilfields. It is already engaged in increasing the productivity of mature oilfields by inducting new technologies and company has begun horizontal drilling in some fields to enhance recovery. Nevertheless, the diversification strategy will be conservative, with OIL sticking to areas in which it has some expertise, Talukdar said.