What is the Samudra Manthan scheme all about? | Explained
The Union Cabinet approved 'Samudra Manthan' — the National Offshore Exploration Scheme — with a total outlay of ₹84,084 crore, to be implemented up to FY 2030-31 under the Ministry of Petroleum and Natural Gas.
The scheme is aimed at boosting India's deepwater and ultra-deepwater hydrocarbon exploration to raise domestic oil and gas production and reduce reliance on imported crude.
If exploration succeeds, the government expects domestic oil and gas production to rise from about 62 million metric tonnes of oil equivalent (MMTOE) to 80 MMTOE annually.
The government estimates that higher domestic production could cut the crude oil import bill by close to ₹1 lakh crore a year.
India's Crude Oil Import Dependence
India imports the overwhelming majority of its crude oil requirement, making energy security a central economic and strategic concern. Import dependence has risen sharply over the past two decades because domestic consumption has grown much faster than domestic production, despite policy efforts to boost exploration.
Key Details
- India's crude oil import dependence has risen from about 55% in FY1999 to roughly 88-90% in recent years.
- Domestic crude oil consumption has grown from around 90.6 million metric tonnes (FY1999) to over 240 MMT currently, while domestic production has eased to around 26 MMT.
- Rising import dependence directly affects the current account deficit and exposes India to global crude price volatility, since crude oil imports form one of the largest components of India's total import bill.
Samudra Manthan is framed explicitly as an energy-security measure — by targeting deepwater and ultra-deepwater reserves that have so far been under-explored, the scheme aims to slow or partially reverse the decades-long rise in import dependence.
Hydrocarbon Exploration Licensing Policy (HELP) and Open Acreage Licensing Policy (OALP)
India's current upstream oil and gas exploration regime is governed by the Hydrocarbon Exploration and Licensing Policy (HELP), which replaced the earlier New Exploration Licensing Policy (NELP). HELP introduced a uniform licence covering all hydrocarbons (oil, gas, coal-bed methane, shale gas), revenue-sharing with government (instead of production-sharing), marketing and pricing freedom for operators, and reduced royalty rates for deepwater and ultra-deepwater blocks to incentivise high-risk exploration. The Open Acreage Licensing Policy (OALP), a component of HELP, allows companies to select and bid for exploration blocks year-round from an open acreage, rather than the government notifying blocks periodically.
Key Details
- HELP was approved in 2016 by the Union Cabinet, replacing the production-sharing-contract-based NELP regime that had run since 1997-98.
- Under HELP's graded royalty structure, deepwater and ultra-deepwater blocks attract lower royalty rates than onland or shallow-water blocks, reflecting the higher exploration risk and cost.
- The Directorate General of Hydrocarbons (DGH), under the Ministry of Petroleum and Natural Gas, administers exploration licensing and maintains India's National Data Repository of seismic and well data.
Samudra Manthan builds on the HELP/OALP framework by directly co-funding the highest-risk, highest-cost stage of exploration — deepwater and ultra-deepwater drilling — supplementing the royalty concessions already available under HELP.
India's Association Status with the International Energy Agency (IEA)
The International Energy Agency (IEA), an autonomous body under the OECD framework established after the 1973 oil crisis, coordinates collective responses to global energy supply disruptions, including strategic petroleum reserves. Full IEA membership is restricted to OECD countries that are net oil importers, but the IEA created an "Association" category in 2015 to bring in major non-OECD economies. India activated its Association status with the IEA in March 2017.
Key Details
- Full IEA members must maintain reserves equivalent to at least 90 days of net oil imports and operate demand-restraint mechanisms; India, as an Association country rather than a full member, is not bound by this requirement but participates in IEA data-sharing and technical cooperation.
- India separately maintains its own Strategic Petroleum Reserves (SPR) — underground caverns at Visakhapatnam, Mangaluru, and Padur — to cushion against short-term supply disruptions.
- India has been engaged in discussions on a pathway to full IEA membership, which would require meeting the 90-day reserve criterion.
Boosting domestic production through initiatives like Samudra Manthan is one route to reducing import vulnerability, complementing the strategic reserve and IEA-cooperation route to energy security.
- Samudra Manthan (National Offshore Exploration Scheme): outlay ₹84,084 crore, implementation up to FY 2030-31, nodal ministry — Petroleum and Natural Gas.
- Targeted production rise: from about 62 MMTOE to 80 MMTOE annually.
- Estimated annual import-bill savings if targets are met: close to ₹1 lakh crore.
- India's crude oil import dependence: roughly 88-90% in recent years, up from about 55% in FY1999.
- HELP approved 2016, replacing NELP (in place since 1997-98); OALP allows year-round block bidding.
- India activated IEA Association status in March 2017; full IEA membership requires maintaining 90 days of import-equivalent reserves.