Union Cabinet approves ₹84,084 crore for offshore exploration scheme ‘Samudra Manthan’
The Union Cabinet approved the Samudra Manthan National Offshore Exploration Scheme with a total outlay of ₹84,084 crore, to be implemented up to FY 2030-31 by the Ministry of Petroleum & Natural Gas.
Within this, ₹43,200 crore has been earmarked specifically for drilling 60 deepwater exploration wells, the scheme's single largest and highest-risk component.
Other components include ₹28,534 crore for acquisition and processing of modern offshore seismic data, ₹10,000 crore for common offshore infrastructure hubs to help commercialise discoveries, and ₹2,000 crore for setting up Oil and Gas Manufacturing and Services Zones.
The scheme aims to raise India's reserve accretion by over 600 million tonnes of oil equivalent (MMTOE) and increase annual oil and gas production from about 62 MMTOE to 80 MMTOE, potentially cutting the crude import bill by close to ₹1 lakh crore a year.
Seismic Surveying and the Offshore Exploration Value Chain
Offshore hydrocarbon exploration proceeds through sequential stages: geological and geophysical surveys (including seismic data acquisition, which images subsurface rock structures using reflected sound waves), exploratory drilling to confirm the presence of hydrocarbons, appraisal drilling to estimate reserve size, and finally development drilling and production. Seismic surveys are the cheapest and lowest-risk stage; deepwater exploratory drilling is the costliest and carries the highest probability of a "dry well."
Key Details
- 2D and 3D seismic surveys use sound wave reflection to map subsurface geological structures likely to trap hydrocarbons, guiding where exploratory wells are drilled.
- Deepwater wells (beyond roughly 400 metres water depth) require specialised drillships or semi-submersible rigs and cost several times more than shallow-water or onland wells, which is why government risk-sharing targets this stage specifically.
- India's National Data Repository (NDR), maintained by the Directorate General of Hydrocarbons (DGH), consolidates seismic and well data to reduce exploration companies' upfront survey costs and information asymmetry.
Samudra Manthan funds both ends of this value chain — ₹28,534 crore for seismic data acquisition to identify promising deepwater structures, and ₹43,200 crore to co-fund the subsequent high-risk drilling of 60 wells to test those structures.
India's Offshore Sedimentary Basins and Continental Shelf
India's hydrocarbon-bearing sedimentary basins include onland, shallow-water, and deepwater categories spread across roughly 3.4 million sq km of basinal area, of which a significant share, especially in frontier and deepwater basins, remains poorly explored. Key offshore producing basins include Mumbai Offshore, Krishna-Godavari (KG), and Cauvery, while less-explored frontier basins include Kerala-Konkan, Mahanadi, and the Andaman offshore area.
Key Details
- Under the UN Convention on the Law of the Sea (UNCLOS), a coastal state has sovereign rights over exploration and exploitation of natural resources in its Exclusive Economic Zone, extending up to 200 nautical miles from the baseline, and can claim an extended continental shelf up to 350 nautical miles subject to geological criteria and Commission on the Limits of the Continental Shelf (CLCS) approval.
- The KG basin (offshore Andhra Pradesh) and Mumbai High field (Arabian Sea, off Maharashtra/Mumbai coast) are India's most productive offshore hydrocarbon areas; Mumbai High alone has historically accounted for a large share of India's crude output.
- India has also pursued extended continental shelf claims before the CLCS to expand the area available for resource exploration beyond the standard 200 nautical mile EEZ.
The 60 deepwater wells under Samudra Manthan target underexplored zones within these offshore basins and India's EEZ, extending exploration beyond the shallow-water fields that have historically driven output.
Government Cost-Sharing for High-Risk Exploration Drilling
Deepwater exploratory drilling has a comparatively low geological success rate, making private and even state-run companies reluctant to commit capital without risk mitigation. Samudra Manthan addresses this through direct government cost-sharing on a per-well basis rather than blanket subsidies, aligning support with actual drilling activity.
Key Details
- Government support for deepwater drilling under the scheme is capped at 50% of the eligible drilling cost per well or ₹675 crore per well, whichever amount is lower.
- This design ensures cost discipline: support scales with real drilling expenditure and is capped per well, unlike open-ended subsidies.
- Similar de-risking philosophy underlies the Discovered Small Field (DSF) policy, which offers marketing and pricing freedom to monetise small discovered fields left idle by national oil companies.
By directly subsidising the highest-risk stage of the value chain, per well and cost-capped, the scheme is structured to maximise the number of deepwater wells drilled per rupee of government spend, rather than provide open-ended sector-wide support.
- Samudra Manthan (National Offshore Exploration Scheme) total outlay: ₹84,084 crore; implementation period up to FY 2030-31; nodal ministry: Petroleum & Natural Gas.
- Deepwater exploration drilling: 60 wells, ₹43,200 crore outlay — the scheme's largest component.
- Other components: seismic data acquisition/processing — ₹28,534 crore; common offshore infrastructure hubs — ₹10,000 crore; Oil and Gas Manufacturing and Services Zones — ₹2,000 crore.
- Government funding cap for drilling: up to 50% of eligible cost per well, or ₹675 crore per well, whichever is lower.
- Targets: reserve accretion of over 600 MMTOE; production rise from ~62 MMTOE to 80 MMTOE annually; India's EEZ extends up to 200 nautical miles under UNCLOS.