The Government of India has reportedly asked Oil and Natural Gas Corporation (ONGC) to develop the country’s next Strategic Petroleum Reserve (SPR) at Mangaluru, Karnataka, according to media reports.
The proposed underground crude oil storage cavern is estimated to cost around ₹15,000 crore and is expected to significantly enhance India’s emergency crude oil storage capacity amid rising geopolitical tensions and global supply uncertainties.
New Strategic Petroleum Reserve Planned at Mangaluru
The proposed facility will have a storage capacity of 1.75 million metric tonnes (MMT) of crude oil.
Once operational, it will increase India’s existing 5.33 MMT strategic petroleum reserve capacity by approximately one-third.
Estimated Project Cost
Component Estimated Cost
Construction of Underground Cavern ₹5,000 crore
Filling Crude Oil Inventory ₹10,000 crore
Total Estimated Cost ₹15,000 crore
Since ONGC already owns the identified land at Mangaluru, the company is expected to finance and develop the project using its own balance sheet.
India’s Existing Strategic Petroleum Reserves
India currently operates three strategic petroleum reserve facilities with a combined capacity of 5.33 MMT (around 39 million barrels).
Location Capacity
Visakhapatnam (Andhra Pradesh) 1.33 MMT
Mangaluru (Karnataka) 1.50 MMT
Padur (Karnataka) 2.50 MMT
Total 5.33 MMT
Given India’s crude oil consumption of approximately 5 million barrels per day, expanding emergency reserves remains an important strategic priority.
What Is a Strategic Petroleum Reserve (SPR)?
A Strategic Petroleum Reserve is a government-maintained emergency stockpile of crude oil designed to protect the country against:
Supply disruptions
Wars and geopolitical conflicts
Sanctions
Shipping disruptions
Sudden spikes in crude oil prices
Unlike commercial inventories maintained by refiners, SPRs are reserved exclusively for national emergencies.
India stores these reserves in underground rock caverns located near major ports and refinery infrastructure to enable rapid deployment when required.
Why India Is Expanding Its Strategic Reserves
India imports nearly 88% of its crude oil requirement, making energy security a critical national priority.
Recent geopolitical developments, including tensions involving Iran and volatility in global oil markets, have reinforced the importance of expanding emergency crude storage capacity.
Strategic Importance of Global Shipping Routes
A significant portion of India’s crude oil imports passes through critical maritime chokepoints such as:
Strait of Hormuz
Bab-el-Mandeb Strait
Malacca Strait
Any disruption along these routes can affect crude supplies and trigger sharp increases in oil prices, making larger strategic reserves essential.
How the Proposed Project Is Different
The proposed Mangaluru project represents a significant shift in India’s SPR development model.
Unlike the existing facilities, which were:
Funded by the Government of India
Operated by Indian Strategic Petroleum Reserve Limited (ISPRL)
the new project is expected to:
Be financed by ONGC
Be constructed using ONGC’s own resources
Become the first SPR developed by a state-owned upstream oil producer on its own balance sheet
ONGC Share Price Performance
As of June 19, 2026 (2:09 PM):
Metric Value
Current Share Price ₹244.75
Previous Close ₹245.30
Day Change -0.22%
Intraday High ₹245.50
Intraday Low ₹243.30
Recent Returns
1 Week: -0.59%
1 Month: -17.45%
Year-to-Date: +2.86%
52-Week Range
High: ₹307.50 (April 29, 2026)
Low: ₹228.61 (December 17, 2025)
Why This Project Matters
Adds 1.75 MMT to India’s emergency crude storage.
Strengthens India’s energy security amid geopolitical uncertainties.
Reduces vulnerability to global supply disruptions.
Marks the first strategic petroleum reserve developed through ONGC’s balance sheet rather than direct government funding.
Supports long-term resilience in India’s energy infrastructure.
Conclusion
The proposed 1.75 MMT Strategic Petroleum Reserve at Mangaluru represents an important step in strengthening India’s energy security. Beyond expanding emergency crude storage capacity, the project introduces a new financing model, with ONGC expected to develop and fund the facility, potentially setting a precedent for future strategic energy infrastructure projects.
Disclaimer:
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