ONGC May Build India's Next Strategic Petroleum Reserve at Mangaluru; Here's Why It Matters

The government has asked Oil and Natural Gas Corporation (ONGC) to develop India's next strategic petroleum reserve (SPR) at Mangaluru in Karnataka, according to a report by The Economic Times. The proposed underground crude oil storage cavern is estimated to cost around ₹15,000 crore and is expected to strengthen India's emergency crude storage capacity amid geopolitical uncertainties and supply disruptions. 

The proposed facility will have a storage capacity of 1.75 million metric tonnes (MMT), increasing India's existing strategic petroleum reserve capacity of 5.33 MMT by roughly one-third. 

ONGC May Develop New Strategic Petroleum Reserve 

The proposed Mangaluru cavern is expected to cost around ₹15,000 crore, with nearly ₹5,000 crore estimated for construction and around ₹10,000 crore required to fill the facility with crude oil at current prices. 

ONGC, which already owns the land identified for the project, is expected to finance and construct the underground storage facility. 

India's Existing Strategic Petroleum Reserve Capacity 

India currently operates 3 strategic petroleum reserve facilities with a combined storage capacity of 5.33 MMT, or around 39 million barrels of crude oil. 

The facilities are located at Visakhapatnam in Andhra Pradesh with 1.33 MMT capacity, Mangaluru in Karnataka with 1.5 MMT capacity and Padur in Karnataka with 2.5 MMT capacity. 

India consumes around 5 million barrels of crude oil every day, making its current emergency reserves relatively limited compared with several major economies. 

What Is a Strategic Petroleum Reserve? 

A strategic petroleum reserve is an emergency stockpile of crude oil maintained by governments to safeguard against supply disruptions, geopolitical conflicts and sudden price volatility. 

Unlike commercial inventories maintained by refiners and oil marketing companies, these reserves are intended for use during emergencies such as wars, sanctions, shipping disruptions or other supply shocks. 

India stores its strategic crude reserves in underground rock caverns located near ports and refinery infrastructure for quicker deployment during crises. 

Why Is India Expanding Its Strategic Reserves? 

India imports nearly 88% of its crude oil requirement, making it one of the world's largest energy importers and exposing it to geopolitical risks and supply disruptions. 

The recent conflict involving Iran and volatility in global crude oil markets have renewed focus on strengthening the country's energy security through larger emergency reserves. 

How Global Supply Routes Affect India's Energy Security 

A large portion of India's crude oil imports passes through strategically important maritime routes such as the Strait of Hormuz, the Bab-el-Mandeb Strait and the Malacca Strait. 

Any disruption along these shipping corridors can affect crude oil supplies and increase price volatility, making strategic petroleum reserves an important component of India's energy security framework. 

How the Proposed ONGC Project Differs 

The proposed Mangaluru project would be the first strategic petroleum reserve to be developed by a state-owned oil producer using its own balance sheet. 

India's existing strategic petroleum reserve facilities were funded by the government and are operated by Indian Strategic Petroleum Reserve Limited (ISPRL). Under the proposed model, ONGC would finance and construct the storage asset. 

ONGC Share Price Performance 

As of 2:09 PM on June 19, 2026, ONGC share price was trading at ₹244.75, down 0.22% from the previous close of ₹245.30. During the session, the stock opened at ₹245.30, touched an intraday high of ₹245.50 and a low of ₹243.30. 

In terms of returns, ONGC share price has declined 0.59% over the last 1 week and 17.45% over the last 1 month. On a year-to-date basis, the stock has gained 2.86%. 

The stock touched its 52-week high of ₹307.50 on April 29, 2026, while the 52-week low stands at ₹228.61 recorded on December 17, 2025. 

Conclusion 

The proposed 1.75 MMT strategic petroleum reserve at Mangaluru would expand India's emergency crude storage capacity and add to the country's energy security infrastructure. The project also marks a shift in the development model, with ONGC expected to finance and construct the facility. 

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