NEW DELHI, AUG 2 (PTI): India is embarking on what could be one of the world’s first large-scale programmes to fund high-risk offshore oil and gas exploration directly from the national budget, wagering that the country’s largely untapped deepwater reserves can help curb its growing dependence on imported crude and gas.
The Union Cabinet last week approved the Rs 84,084-crore Samudra Manthan National Offshore Exploration Scheme, under which the government will fund half of the the cost of drilling a deepsea and ultra-deep water exploration well or Rs 650 crore, whichever is lower, directly from the budget, officials said.
“This perhaps is the first time that any government in the world is funding risk exploration from the budget,” an official said, adding that in all, 60 deepwater and ultra-deepwater exploration wells over the next five years will be funded from the budget. Besides underwriting part of the cost of drilling exploration wells, the government will part-fund common infrastructure, including subsea pipelines and onshore oil and gas receipt and processing facilities, allowing multiple operators to commercialise hydrocarbon discoveries using shared assets.
Officials said private companies have largely shied away from risk exploration because the investment has to be written-off if no commercially viable hydrocarbon discovery is made. “They were spending money only on development drilling — producing already established discoveries. Hardly any money went into risk exploration, which is key to finding new resources,” an official said.
“Samudra Manthan is, in that sense, a game-changing scheme,” another official said.
Companies holding blocks awarded under previous Open Acreage Licensing Programme (OALP) rounds, as well as those securing acreage in the ongoing bid round, will be eligible to claim government support of up to Rs 650 crore for each deepwater or ultra-deepwater exploratory well they drill, the official said. The scheme is designed to draw global energy majors into India’s offshore basins.
Prashant Vashisht, Senior Vice President, ICRA Ltd, said the scheme provides funds for offshore seismic data acquisition especially in erstwhile No-Go zones, which is a key issue hampering commercial exploitation of oil and gas reserves in these areas due to lack of good prospectivity data.
“Additionally, the scheme provides support for drilling deepwater/ultra-deepwater wells where the domestic Upstream sector has limited experience and technical expertise and exploitation of the same remains highly capital intensive and risky. The scheme aims to add incremental annual production of 10-15 million tonne of oil equivalent which would reduce the dependence on imports of oil and gas but only to the extent of 3-5 per cent,” he said.
Monday, August 3, 2026