The National Offshore Exploration Scheme, ‘Samudra Manthan’ with a total outlay of ₹84,084 crore through FY31, will be marked as India’s biggest-ever offshore hydrocarbon exploration initiative aimed at reducing the country’s dependence on imported crude oil and natural gas.
The central sector scheme of the Ministry of Petroleum & Natural Gas seeks to accelerate exploration in deepwater and ultra-deepwater basins by sharing exploration risks with the industry and strengthening India’s long-term energy security.
India, the world’s third-largest crude oil consumer, currently spends nearly USD 144 billion (around ₹13 lakh crore) annually on crude oil imports. The government said the scheme assumes greater significance as the country’s energy demand continues to grow amid global geopolitical uncertainties.
Deepwater exploration gets major push
A key feature of the scheme is government support of up to 50% of the eligible drilling cost, capped at ₹675 crore per well, for 60 deepwater exploration wells. The initiative is expected to reduce financial risks for exploration companies and encourage greater private sector participation in offshore hydrocarbon exploration.
Deepwater exploration is capital-intensive, with each exploratory well costing between $125 million and $150 million, while commercial production typically takes five to ten years after an exploration block is awarded.
The government noted that domestic oil and gas production from existing fields declines naturally by 6-7% annually, making continuous exploration essential to sustain production.
Four-pronged strategy
The Samudra Manthan scheme comprises four major components: ₹28,534 crore for acquisition and processing of modern offshore seismic data. ₹43,200 crore for drilling 60 deepwater exploration wells. ₹10,000 crore for developing common offshore infrastructure hubs to support commercialisation of discoveries and ₹2,000 crore for setting up Oil & Gas Manufacturing and Services Zones to promote domestic manufacturing and localisation of critical equipment and services.
Builds on sector reforms
The scheme builds on a series of structural reforms undertaken since 2014 to make India’s exploration and production sector more attractive for investment.
These include opening over 99% of previously restricted offshore areas, making more than one million square kilometres of India’s Exclusive Economic Zone available for exploration, replacing production-sharing contracts with revenue-sharing contracts, modernising petroleum legislation and streamlining regulatory processes.
The government has also reoriented the performance metrics of state-run explorers ONGC and Oil India to place greater emphasis on exploration activities.
Focus on frontier basins
The mission will primarily target India’s frontier offshore basins, including the Krishna-Godavari, Cauvery, Mahanadi and Andaman regions, which are believed to hold significant untapped hydrocarbon reserves.
According to the government, the initiative represents the transition from policy reforms to mission-mode implementation and is expected to catalyse private investment, strengthen domestic oil and gas production, improve energy resilience and build long-term capabilities across India’s offshore exploration value chain.