Examination of R&D Activities of Oil PSUs

Standing Committee Report Summary

• The Standing Committee on Petroleum and Natural Gas (Chair: Mr. Sunil Tatkare) presented its report on the ‘Examination of R&D Activities of Oil PSUs’ on August 12, 2026.  The Committee examined the research and development (R&D) activities undertaken by 11 public sector undertakings (PSUs) working in the oil and natural gas sector.  Key observations and recommendations of the Committee include: 

• Mandated minimum R&D expenditure:  Data provided to the Committee showed that in 2020-21, gross expenditure in R&D in the petroleum sector was about 1.3% of the country’s total gross R&D expenditure.  In 2025-26, major oil PSUs spent around 2% of their combined profit after tax on R&D.  However, the spending by each PSU differed, ranging from 1.3% to 3.8%.  The Committee recommended that a benchmark of minimum expenditure on R&D be set for all PSUs.  This would be a minimum percentage of their profit before tax, subject to periodic adjustments.  It also recommended creating a dedicated fund to co-finance R&D projects, and introducing measures to encourage private sector co-investment in R&D. 

• R&D governance and oversight:  The Committee noted that there was no clarity on how PSUs set R&D priorities, choose cross-PSU missions, or avoid project duplication.  It recommended that the Centre of Excellence in Oil, Gas, and Energy run a ‘National Mission Portfolio’, which links R&D with national goals.  It also recommended providing the R&D department with representation on the board of oil PSUs, to ensure alignment of business goals and research strategies.

• R&D performance evaluation:  The Committee noted that the R&D ecosystem of oil PSUs comprises 16 R&D centres, and five regional laboratories across the country.  It noted that there was no standard benchmark to evaluate the performance of PSU research centres.  The Committee recommended formulating a standardised benchmarking system and a reporting mechanism.  These would include metrics such as technology transfer success rate, external research collaboration, commercial adoption level, and promotion of clean energy.  It also recommended institutionalising a unified, periodic review mechanism conducted by a team including the Centre for High Technology, the Scientific Advisory Committee, R&D heads of all oil PSUs, and independent experts. 

• Exploration of new products and technologies:  The Committee noted that oil PSUs are exploring technologies for oil recovery, deep-water oil extraction, and extraction of shale oil and gas hydrates.  However, limited success has been achieved in commercial extraction of gas hydrates and shale oil.  The Committee recommended that the government: (i) continue the exploration of unconventional hydrocarbon resources, (ii) explore collaborations with international leaders in these technologies, and (iii) explore public-private partnerships for pilot production and scaling up. 

• Industry-academia collaboration:  The Committee noted that oil PSUs collaborate with reputed national and international academic and research institutions.  However, engagements are largely short-term, facilitated through agreements with individual PSUs.  It also noted that oil PSUs had funded more than 150 start-ups.  The Committee recommended increasing long-term collaboration between oil PSUs and global universities/labs/companies, with shared funding and agreements on intellectual property sharing.  It also recommended that PSUs set up a fund to finance full-scale trials and commercial use of start-up technologies in PSU plants. 

• Monetisation of R&D:  The Committee observed that oil and gas PSUs developed and used technologies internally, but did not have the machinery to scale and market them.  It recommended that PSUs begin managing patents as a business portfolio, and identify strategies to obtain commercial outcomes from R&D.

• Human resources for R&D:  The Committee observed that requirement based hiring for R&D does not allow a continuous talent pipeline to be maintained.  It also noted the need for a long-term plan to match human resources (HR) with R&D goals.  The Committee recommended: (i) creating a dedicated R&D career track in oil PSUs, (ii) providing performance-linked incentives for deployed patents and royalty-earning technologies, and (iii) formulating a robust HR framework to standardise recruitment and progression norms across oil PSUs.