India's Oil Sector Turns to Rajasthan's Thar Desert to Mitigate Market Volatility

Oil India Ltd Achieves Record Crude Production in Rajasthan's Thar Desert

Amid heightened geopolitical tensions and uncertainty in global oil markets, Oil India Ltd has significantly ramped up crude production from Rajasthan's Thar desert, achieving a record output of 1,202 barrels per day from the Jodhpur sandstone formation. This represents a 70% increase in production compared to last year's 705 barrels per day, marking a major milestone in efforts to boost domestic output and strengthen energy security.

The crude oil produced in the Baghewala field in Jaisalmer is transported by tankers to Oil and Natural Gas Corporation (ONGC) facilities in Mehsana, Gujarat, from where it is sent via pipeline to the Koyali refinery operated by Indian Oil Corporation Ltd (IOCL).

In the financial year 2025-26, Oil India's Rajasthan field recorded an annual production of 43,773 metric tonnes of crude oil, up from 32,787 metric tonnes in the previous year, reflecting strong growth driven by technological advancements and efficient operations.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The success is largely attributed to the deployment of advanced recovery techniques, including Cyclic Steam Stimulation (CSS), a thermal enhanced oil recovery method used for extracting high-viscosity crude. The company has completed CSS operations in 19 wells, around 72% higher than last year, and drilled 13 new wells during the year, up from nine earlier.

The Baghewala oil field, located in the Bikaner-Nagaur sub-basin of the Rajasthan basin, is among the few onshore heavy oil fields in India. Oil India has also deployed advanced drilling and production technologies such as fishbone drilling and barefoot completion, being used for the first time in India's heavy oil reserves, along with electric downhole heaters, hydraulic sucker rod pumps, and high-temperature thermal wellheads to enhance production efficiency.

Due to the high viscosity of crude in the region, conventional extraction methods were not viable, prompting the adoption of innovative approaches such as diluent injection and artificial lift systems. Oil India has been producing heavy crude from the Baghewala field since 2017, with the field currently having 52 wells, of which 33 are operational.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The successful implementation of CSS technology, first piloted in 2018, has been a game-changer, enabling large-scale extraction and setting new benchmarks in thermal enhanced oil recovery in India. The achievement will play a key role in reducing India's dependence on imported crude and enhancing long-term energy resilience.