Indian Oil to double down on assets as ties improve

“We will be one of the major (Indian) companies (in Canada). We will move forward. We will work with Canada in various areas. It could be crude oil supply, LNG supply and it could be doing exploration there. We usually move globally with a local partner for exploration and we can do more exploration there,” Sahney said. Mint.

The move comes as New Delhi and Ottawa are working on a strategic reset following a leadership change in Canada, with Prime Minister Mark Carney taking office, and a period of tensions over pro-Khalistan elements based in Canada. Both countries are working on new U.S. tariffs and looking for ways to deepen their energy partnerships.

Earlier this week, India and Canada launched a renewed Ministerial Energy Dialogue, with both sides emphasizing the importance of energy security and supply diversity for the economic vitality of the two countries. Bilateral relations were revived last year after both countries expelled each other’s diplomats and India recalled its high commissioner from Canada in October 2024.

Canada does not currently supply energy to India. However, with India continuously diversifying its energy supply basket, efforts to strengthen energy ties have accelerated. According to Canadian government data, Canada is the world’s fourth largest oil producer with a production of over 5 million barrels per day as of 2024. It also has the world’s fourth largest proven oil reserves of 163 billion barrels, 159 billion barrels of which consist of oil sands.

Asked whether Indian Oil would invest more in its Canadian subsidiary, IndOil Montney Ltd, Sahney said, “Yes…We will continue with the projects as they come. We intend to increase the commitment of our subsidiary in Canada.”

Why is Canada important?

The move is significant for India, the world’s third-largest oil buyer, which imports nearly 90% of its crude oil needs and supplied $161 billion worth of oil last fiscal year, accounting for nearly a quarter of the country’s import bill. A $1 per barrel drop in oil prices reduces India’s import bill by approx. ₹13,000 crore.

India is the world’s fourth largest refinery with a total annual capacity of 258.1 million tonnes (mtpa) and is expected to increase to 309.5 mtpa by 2030. Indian Oil accounts for about 31% of the existing capacity at 87.5 mtpa.

Indian Oil, the country’s largest refiner, reported upstream production of 4.45 million metric tons of oil equivalent (MMtoe) last fiscal, up from 4.26 MMtoe in the previous year. In its annual report for FY25, the company attributed some of the increase to higher production from its Pacific NorthWest LNG project in Canada.

IndianOil, through IndOil Montney Ltd, Canada, acquired a 10% stake in shale gas assets, along with the proposed Pacific NorthWest LNG Ltd export facility in British Columbia and Canada’s west coast, from Malaysian Petroliam Nasional Bhd (Petronas) in a $1.1 billion transaction in 2014. The company has not made a major investment in Canada’s exploration and production since this acquisition.

According to its annual report, as of FY25, proven developed reserves of IndianOil’s Canadian assets stood at 1,670.73 thousand metric tons of crude oil and 14,922.47 million cubic meters of natural gas.

IndOil Global BV is the Netherlands-based investment arm of Indian Oil for exploration and production assets in Canada and the United Arab Emirates; IndOil Montney Ltd is its shrinking subsidiary.

We are diversifying beyond Russia

On navigating volatile oil markets amid U.S. tariffs and pressure to reduce imports of Russian crude, Sahney said: “As a company, we want to be on the right track commercially… That’s my job, to source crude oil from a broad basket to the broadest canvas and process it in the most profitable, most cost-effective way and distribute it to the customer at the least cost.”

India currently imports oil from around 41 countries. Since sanctions against Rosneft and LUKOIL came into effect in November, India has been looking for ways to further diversify its import basket. Last month, the parliamentary standing committee on oil and natural gas had expressed concerns over India’s high import dependence and called for diversification of crude oil sources.

Sahney said Indian Oil will look at sourcing from smaller oil-producing countries, including Africa.

“There are a few countries that produce very little fuel, maybe one cargo a month or two cargoes a month. That’s the kind of resource we’re now encouraging to bring in (more crude oil) as well,” he said.

Sahney also noted that Brazil, Colombia and Guyana have also emerged as new suppliers. Data from ship tracking firm Kpler showed average supply from Brazil in the first 20 days of January was 239,000 barrels per day, 98,000 barrels per day from Colombia and 210,000 barrels per day from Guyana.

“Brazil is coming up. Colombia is coming up and Guyana is coming up. These are factors that weren’t there like three years ago. And now we’ve opened up those three sources. We’re also looking at some smaller countries that we haven’t looked at before, but we’re getting into those because we want to diversify our sources,” he said.

India’s energy imports will also increase as total petroleum product consumption is projected to reach a record 252.9 million metric tonnes in FY26, up 4.65% from 241.8 million tonnes in FY25, according to the Petroleum Planning and Analysis Cell of the ministry of petroleum and natural gas.

The reporter is in Panaji on the invitation of the union ministry of petroleum and natural gas.