(Bloomberg) – India’s largest explorer Oil and Natural Gas Corp. is seeking to diversify its portfolio to shield its core business from volatile oil prices, said Arunangshu Sarkar, director for strategy at the state-run giant.

The company’s multi-pronged approach involves entering the refining and petrochemical sectors, trading liquefied natural gas (LNG) and growing its renewable capacity. 

According to the International Energy Agency, the world is entering an era of cheaper energy prices, with growing electricity use leading to a surplus of oil and gas. ONGC is among the several oil majors looking to diversify their business strategies as the global economy moves away from fossil fuels.

“Globally, we are heading to a glut in oil supplies which means prices will reduce,” Sarkar said in an interview. “It will be difficult for a company like ONGC to survive in a low oil-price regime and the new businesses provide a hedge for such a scenario.” 

While crude prices decline, production costs for the explorer are on the rise, with easily available oil already extracted and depleted fields yielding little fuel, further squeezing profits.

Sarkar, a petroleum engineer, took charge as ONGC’s first director for strategy in September. 

The New Delhi-based company is seeking to book 3 million tons a year of regasification capacity on the country’s western coast and is already discussing long-term offtake deals with city gas retailers, Sarkar said. Since benchmark indices are linked to crude, importing cheap gas to be sold in India can help offset lower profits due to oil volatility, he added.

ONGC is also planning to build its first refinery, with a focus on oil-to-chemicals, Sarkar said, declining to give more details as the plan is still at a nascent stage. At a group level, ONGC already has a refining capacity of 1 million bpd, or a fifth of India’s total, through its units Hindustan Petroleum Corp Ltd. and Mangalore Refinery and Petrochemicals Ltd. 

Refiners are increasingly turning to petrochemicals as the spread of electric vehicles is projected to dent demand growth for diesel and gasoline.

The third pillar of diversification is clean energy. The company has set a target to reach 10 gigawatts of renewable capacity by 2030, about three times more than now. It will soon be seeking bids to build 1 gigawatt of solar and wind power capacity for its captive use, Sarkar added.