India has approved its most ambitious offshore oil and gas exploration programme yet, placing a large public investment behind the search for hydrocarbons beneath its deepwater and ultra-deepwater regions.
The Prime Minister Narendra Modi led Union Cabinet has cleared Samudra Manthan, officially called the National Offshore Exploration Scheme, with an outlay of ₹84,084 crore up to the financial year 2030-31.
According to the government, this approval marks the “culmination of a series of transformative reforms undertaken… to strengthen India’s hydrocarbon exploration and production sector”.
“The National Offshore Exploration Scheme, Samudra Manthan, builds upon these reforms by translating policy into action and opening a new chapter in India’s journey towards energy security and Atmanirbhar Bharat,” it added.
The government expects the programme to improve seismic mapping, finance deepwater drilling, create shared offshore infrastructure and build domestic manufacturing capacity for the oil and gas sector.
The central question, however, is not merely how much India plans to spend. It is whether exploration beneath the sea can produce enough commercially viable oil and gas to meaningfully reduce the country’s dependence on imports.
Why Is India Looking Beneath the Sea?
India is the world’s third-largest consumer of crude oil, with its annual oil import bill estimated at nearly $144 billion, or about Rs 13 lakh crore.
For a rapidly growing economy, such dependence creates strategic and financial risks as international conflicts, sanctions, supply disruptions and sudden movements in global crude prices can affect domestic fuel costs, inflation and the trade balance.
Raising domestic oil and gas production is therefore essential not only for reducing imports but also for strengthening India’s long-term energy security.
Existing domestic fields also cannot maintain their output indefinitely.
“ With India’s energy demand expected to rise steadily in the coming decades, enhancing domestic oil and gas production is essential for reducing import dependence, strengthening energy resilience, and securing the nation’s long-term economic growth,” the government said.
According to the scheme document, production from established oil and gas fields naturally declines by around 6-7 per cent every year.
New exploration must therefore replace declining production before it can substantially increase the country’s overall output.
What Exactly Is ‘Samudra Manthan’?
Samudra Manthan is a Central Sector Scheme under the Ministry of Petroleum and Natural Gas with a purpose to move India’s offshore exploration programme from regulatory reform to large-scale implementation.
The mission brings together four major interventions: collecting modern offshore geological data, drilling exploratory wells, developing shared infrastructure for discoveries and supporting domestic production of specialised equipment and services.
“The National Offshore Exploration Scheme “Samudra Manthan” marks the transition from policy reforms to mission-mode implementation. Approved as a Central Sector Scheme with a Phase-I outlay of ₹84,084 crore up to 31 March 2031, the scheme adopts an integrated approach to accelerate offshore hydrocarbon exploration and production,” the government said.
Rather than depending entirely on individual oil companies to carry the cost and risk, the government will directly finance data acquisition and share part of the cost of drilling in difficult offshore regions.
The programme is intended to encourage both public and private operators to explore areas where the geological potential may be significant but the financial risks remain high.
How Will the ₹84,084 Crore Be Spent?
The scheme’s largest share, ₹43,200 crore, will be allocated for drilling 60 deepwater exploration wells.
Another ₹28,534 crore will be spent on acquiring and processing modern offshore seismic data. This includes basin-wide 2D seismic surveys (₹12,000 crore), more detailed 3D surveys (₹12,534 crore), reprocessing of existing National Data Repository information and the use of artificial intelligence tools (₹4,000 crore).
The government has also allocated ₹10,000 crore for common offshore infrastructure hubs.
These facilities are expected to help companies connect new discoveries to processing and transportation systems, reducing the cost and time required to begin production.
A further ₹2,000 crore will support development of oil and gas manufacturing and services zones, with the objective of developing domestic capabilities in critical offshore equipment and specialised services.
Further, another ₹350 crore has been earmarked for monitoring and support activities.
“The scheme comprises four key components: (i) acquisition and processing of modern offshore seismic data with an outlay of ₹28,534 crore; (ii) drilling of 60 deepwater exploration wells with an allocation of ₹43,200 crore, including Government support of up to 50% of eligible drilling cost or ₹675 crore per well, whichever is lower; (iii) development of common offshore infrastructure hubs with an outlay of ₹10,000 crore to facilitate commercialisation of discoveries; and (iv) establishment of Oil and Gas Manufacturing and Services Zones with an outlay of ₹2,000 crore to promote domestic manufacturing and localisation of critical equipment and services,” the government said.
Why Is the Government Paying for Exploration Wells?
The process of deepwater exploration is expensive, technologically demanding and highly uncertain.
A single exploratory well in a deepwater or ultra-deepwater basin can cost approximately $125-150 million.
However, even after such expenditure, drilling may not lead to a commercially recoverable discovery.
Under Samudra Manthan, the government will provide financial support of up to 50% of the eligible drilling cost, subject to a ceiling of ₹675 crore per well.
The aim is to distribute part of the exploration risk between the government and operators.
By lowering the amount companies must risk on each well, the scheme seeks to attract greater investment into frontier areas that might otherwise remain unexplored.
This risk-sharing model is important because offshore drilling differs from conventional infrastructure investment.
A road, port or power plant creates a visible asset after construction but an exploratory well may reveal a major resource, a small uneconomic reserve or no commercially usable hydrocarbons at all.
Where Will the Exploration Take Place?
The government believes that much of India’s future hydrocarbon potential lies in deepwater and ultra-deepwater basins.
The scheme identifies the Krishna-Godavari, Cauvery, Mahanadi and Andaman regions among the important frontier areas.
These basins require advanced seismic imaging, specialised drilling vessels, subsea equipment and highly trained technical personnel.
The programme follows the removal of restrictions across large parts of India’s maritime zone.
According to the government, more than 99% of areas earlier classified as “No-Go” zones have now been opened, making over one million square kilometres of India’s Exclusive Economic Zone available for exploration.
Opening an area, however, does not confirm that commercially recoverable oil or gas exists beneath it. It only enables surveys, licensing and exploratory drilling to proceed.
What Policy Changes Prepared the Ground?
Samudra Manthan comes after a series of regulatory and contractual changes in India’s hydrocarbon sector.
The government has shifted from Production Sharing Contracts to Revenue Sharing Contracts, seeking to simplify the fiscal framework and reduce administrative intervention.
The Oilfields (Regulation and Development) Amendment Act, 2025 updated the legal framework for petroleum operations. Meanwhile, the Petroleum and Natural Gas Rules, 2025 were introduced to streamline petroleum leases and improve regulatory efficiency.
The performance parameters of state-owned ONGC and Oil India have also been reoriented to place greater emphasis on exploration.
The new scheme effectively adds financial support and common infrastructure to these earlier regulatory changes.
Can the Scheme Really Cut Imports by ₹1 Lakh Crore?
The government has set ambitious goals under the scheme, but they are explicitly linked to exploration success.
Samudra Manthan aims to raise India’s domestic oil and gas production from around 62 million metric tonnes of oil equivalent to 80 MMTOE annually.
The scheme also aims to expand the country’s hydrocarbon resource base from 1.6 billion tonnes of oil equivalent to 2.2 billion TOE.
According to the government estimates, the additional production could reduce crude oil imports by nearly ₹1 lakh crore annually.
“Subject to exploration success, the National Offshore Exploration Scheme – Samudra Manthan – aims to increase India’s domestic oil and gas production from around 62 MMTOE to 80 MMTOE annually and expand the country’s hydrocarbon resource base from 1.6 billion TOE to 2.2 billion TOE. The additional production has the potential to reduce crude oil imports by nearly ₹1 lakh crore annually, strengthening India’s energy security and reducing import dependence,” the government said.
That number represents potential savings rather than a guaranteed fiscal return as the final outcome will depend on whether the surveys identify promising structures, whether exploratory wells lead to significant discoveries and whether those discoveries can be commercially developed.
Import savings would also be influenced by global crude prices, domestic demand, the quality of discovered hydrocarbons and the cost of producing them offshore.
Why Will Results Take Time?
Offshore exploration is a long-gestation business.
The government document says it generally takes five to ten years from the award of an exploration block to the beginning of commercial production.
“Hydrocarbon exploration is a capital-intensive and long-gestation activity, with a typical period of 5–10 years from the award of an exploration block to the commencement of commercial production,” it said.
Geological surveys must first identify potential reserves after which exploratory wells must then confirm the presence and size of a discovery.
After that, companies must assess commercial viability, secure approvals, install production systems and connect offshore fields to pipelines, processing facilities or transportation networks.
The ₹10,000-crore provision for common infrastructure is intended to shorten part of this process.
Shared platforms, pipelines, subsea systems and processing facilities could make smaller or geographically dispersed discoveries easier to commercialise.
Even so, Samudra Manthan is unlikely to produce an immediate reduction in India’s oil import bill.
Its impact, should commercially successful discoveries emerge, will be visible over several years.
What Will Determine the Mission’s Success?
The success of Samudra Manthan will ultimately be judged on three levels.
First, the programme must generate more accurate geological data about India’s offshore basins.
Second, the proposed drilling campaign must result in commercially recoverable discoveries.
And, third, those discoveries must move into production without excessive delays or costs.
The scheme could also have a wider industrial impact if manufacturing and service zones create domestic capacity in offshore engineering, subsea equipment, drilling services and data processing.
But the defining test will remain production. Seismic surveys, exploration wells and infrastructure spending can improve India’s chances of finding hydrocarbons; they cannot guarantee that sufficiently large reserves will be discovered.
Samudra Manthan is therefore a long-term strategic bet. India is spending ₹84,084 crore to improve the odds of discovering and producing more of its own energy beneath the sea.
Whether that bet eventually saves ₹1 lakh crore in annual imports will depend on what the drill bit actually finds.
