A deep dive with Rs 84,084 crore scheme for offshore oil and gas exploration
The Union Cabinet approved "Samudra Manthan" — the National Offshore Exploration Scheme — a Central Sector Scheme of the Ministry of Petroleum & Natural Gas with a total outlay of ₹84,084 crore, to be implemented up to FY 2030-31.
The scheme is designed to boost domestic oil and gas production and accelerate reserve accretion by de-risking offshore exploration, particularly in deepwater and ultra-deepwater areas where private and public players have historically been reluctant to invest.
Under the scheme, the government will co-fund deepwater exploratory drilling, covering up to half the eligible drilling cost per well, to reduce the financial risk exploration companies face in high-cost, high-uncertainty offshore blocks.
The scheme traces its origin to a vision for offshore energy exploration articulated by the Union government from the Red Fort on Independence Day 2025, describing it as a "modern-day Samudra Manthan" to unlock India's offshore energy potential.
It targets reserve accretion of more than 600 million tonnes of oil equivalent (MMTOE) and aims to raise India's domestic oil and gas production from about 62 MMTOE to 80 MMTOE annually.
Offshore Exploration and India's Sedimentary Basins
India has 26 sedimentary basins spread across onland, shallow water, and deepwater/offshore areas, covering roughly 3.4 million sq km, of which a large share remains unexplored or poorly explored, especially in deepwater and frontier basins such as the Andaman offshore, Kerala-Konkan, and Mahanadi basins. Offshore exploration in India is concentrated in proven basins like Mumbai Offshore, Krishna-Godavari (KG), and Cauvery, while deeper frontier basins remain largely unexplored due to high capital cost and technical risk.
Key Details
- Deepwater exploration (water depth beyond ~400 metres) and ultra-deepwater exploration require specialised drilling rigs and carry exploration success rates far lower than onland or shallow-water drilling, which is why government risk-sharing is used to attract investment.
- The Directorate General of Hydrocarbons (DGH), under the Ministry of Petroleum & Natural Gas, is the technical regulator that manages exploration licensing rounds and maintains India's National Data Repository (NDR) of geoscientific data.
- India's Exclusive Economic Zone (EEZ) extends up to 200 nautical miles from the baseline under UNCLOS, within which the state has sovereign rights over exploration and exploitation of natural resources, including hydrocarbons.
Samudra Manthan's ₹43,200 crore component for drilling 60 deepwater exploration wells directly targets these underexplored offshore basins within India's EEZ, using government cost-sharing to overcome the risk barrier that has historically kept private and even state-run explorers from drilling in deepwater zones.
Hydrocarbon Exploration and Licensing Policy (HELP) and Revenue-Sharing Model
HELP, approved in 2016, replaced the earlier New Exploration Licensing Policy (NELP) and introduced a uniform licence covering all hydrocarbon forms (oil, gas, coal-bed methane, shale gas), an Open Acreage Licensing Policy (OALP) allowing companies to nominate exploration blocks year-round, a revenue-sharing model in place of profit-sharing, and marketing and pricing freedom for produced crude oil and natural gas.
Key Details
- Under the revenue-sharing model, the government's share depends on gross revenue from production, unlike NELP's profit-sharing contracts, which required the government to audit exploration companies' costs.
- OALP, launched in June 2017 alongside the National Data Repository, lets companies carve out and bid for exploration blocks anywhere except "no-go" areas, replacing the earlier fixed-round bidding system.
- Discovered Small Field (DSF) policy rounds separately monetise small and marginal discovered fields lying idle with national oil companies.
Samudra Manthan works alongside the HELP/OALP licensing framework — while HELP determines who explores and on what commercial terms, Samudra Manthan directly funds the highest-risk, highest-cost stage (deepwater drilling and seismic survey) to make offshore blocks commercially attractive under that framework.
India's Crude Oil Import Dependence and Energy Security
India imports the vast majority of its crude oil requirement, with import dependence touching a record high of around 88-89% in 2025-26 even as domestic crude production has continued to decline, making energy security a central economic and strategic policy concern.
Key Details
- Domestic crude oil production has fallen even as consumption has risen, widening the import gap and increasing exposure to global price volatility and supply-route risks (e.g., the Strait of Hormuz).
- Schemes that raise domestic reserve accretion and production, such as Samudra Manthan, are projected to reduce the annual crude import bill by an estimated ₹1 lakh crore if targets are met.
- Energy security strategy in India also includes strategic petroleum reserves, diversification of import sources, and blending programmes (e.g., ethanol blending in petrol) to cut net petroleum import dependence.
By targeting a rise in domestic output from about 62 to 80 MMTOE annually, Samudra Manthan is positioned as a direct lever against India's rising crude import dependence, complementing demand-side measures like ethanol blending.
- Samudra Manthan (National Offshore Exploration Scheme): ₹84,084 crore outlay, Central Sector Scheme, Ministry of Petroleum & Natural Gas, implementation period up to FY 2030-31.
- Component-wise outlay: seismic data acquisition and processing — ₹28,534 crore; deepwater exploration drilling (60 wells) — ₹43,200 crore; common offshore infrastructure hubs — ₹10,000 crore; Oil and Gas Manufacturing and Services Zones — ₹2,000 crore.
- Government funding for deepwater drilling: up to 50% of eligible drilling cost per well, or ₹675 crore per well, whichever is lower.
- Targets: reserve accretion of over 600 MMTOE; production increase from ~62 MMTOE to 80 MMTOE annually; potential reduction in crude import bill of about ₹1 lakh crore per year.
- India's crude oil import dependence reached a record ~88.7% in 2025-26, up from 85.5% in 2021-22, as domestic crude production declined.