India’s Rs 84,084-crore Samudra Manthan scheme aims to boost seismic surveys, deepwater drilling and shared offshore infrastructure, with the bigger test being whether it can turn resource potential into commercial production.
With the government approving Samudra Manthan, the National Offshore Exploration Scheme, with a Phase-I outlay of Rs 84,084 crore through FY2030-31, the country is moving beyond regulatory reforms and opening up offshore acreage towards a more interventionist strategy: fund exploration, share risks, build infrastructure and create the domestic capabilities needed to bring difficult deepwater discoveries into production.
The rationale is straightforward. India remains heavily dependent on imported energy even as demand continues to rise. The government puts the annual crude oil import bill at nearly $144 billion, while the supplied material estimates that India imports close to 88.5 per cent of the crude it consumes. That dependence leaves the economy vulnerable to geopolitical disruptions and sudden swings in global energy prices.
Samudra Manthan is therefore less about simply finding more oil and gas than about reducing the economic vulnerability created by importing them.
From no-go zones to an offshore exploration push
The most striking change has been the opening of offshore acreage.
The government says more than 99 per cent of previously restricted offshore areas have been opened for exploration, making over one million square kilometres of India’s Exclusive Economic Zone available. The supplied material notes that the “no-go” area has been reduced sharply, effectively opening most of the country’s offshore territory to exploration.
More from BusinessBut access alone does not create energy security.
India’s offshore basins extend to water depths of nearly 3,000 metres and are estimated to contain more than 5,600 million metric tonnes of oil equivalent (MMTOE) of hydrocarbon potential. Recent discoveries in the Cauvery, Mahanadi and Andaman basins have added to the optimism. Yet deepwater exploration remains expensive, technically demanding and uncertain. That is the gap Samudra Manthan is designed to address.
The government is putting money behind the risk
The scheme effectively creates a risk-sharing framework for an industry in which exploration can take years before generating commercial returns. A single deepwater exploratory well can cost between $125 million and $150 million, while the journey from awarding an exploration block to commercial production can take five to 10 years. At the same time, existing fields naturally decline by around 6-7 per cent a year, making continued exploration necessary even to prevent domestic output from falling.
The largest allocation under Samudra Manthan — Rs 43,200 crore — is earmarked for accelerated offshore exploration, including 60 deepwater and ultra-deepwater wells. Government assistance can cover up to 50 per cent of eligible drilling costs, subject to a ceiling of Rs 675 crore per well. Both public and private exploration companies are eligible.
That could materially change the economics of drilling in frontier basins.
Data first, drilling next
A major weakness in offshore exploration has been inadequate geological and seismic information.
Samudra Manthan allocates Rs 28,534 crore to large-scale 2D and 3D seismic surveys, including the reprocessing of older data using artificial intelligence and modern analytical tools. Better subsurface mapping should allow companies to identify more promising prospects before committing hundreds of millions of dollars to drilling.
The government is also attempting to solve what comes after discovery.
Turning discoveries into production
Finding hydrocarbons is only the first step. India has several offshore discoveries that have remained difficult to commercialise because of the high cost of production and evacuation infrastructure.
Samudra Manthan therefore earmarks Rs 10,000 crore for common offshore production and evacuation facilities in selected basins, particularly Mahanadi and Kutch. Shared infrastructure could reduce the cost for individual operators and make smaller or technically challenging discoveries more commercially viable.
Another Rs 2,000 crore is allocated for an integrated oil and gas manufacturing and services zone. The objective is to develop domestic capabilities in equipment manufacturing, repair, warehousing, engineering and specialised offshore services.
This gives the scheme a second strategic objective beyond energy production: building an Indian offshore industrial ecosystem.
ONGC and Oil India will be central
State-run explorers ONGC and Oil India are expected to drive the programme, with the government also seeking greater participation from private and potentially global players.
An ONGC-led joint venture for drillship capacity is intended to address another bottleneck: access to specialised drilling assets. Shared investment and long-term chartering could make deepwater drilling capacity more readily available as exploration activity expands.
For ONGC, the economics are also becoming more favourable if crude prices remain sufficiently high. The supplied brokerage assessment says the company expects long-run oil prices around $75 a barrel, making some deepwater exploration that was difficult to justify at $60-$65 more financially viable.
The numbers are ambitious
The government expects Samudra Manthan to add more than 600 MMTOE to India’s hydrocarbon reserves, taking the resource base from roughly 1.6 billion to 2.2 billion tonnes of oil equivalent.
Domestic production is targeted to rise from around 62 MMTOE to nearly 80 MMTOE annually, with incremental production estimated at 10-15 MMTOE and peak potential of 20 MMTOE. The government also estimates that additional output could eventually reduce the crude import bill by nearly Rs 1 lakh crore a year.
But these are potential gains, not guaranteed outcomes. Exploration is inherently uncertain. Opening acreage, collecting seismic data and subsidising drilling can improve the odds of success, but none guarantees commercially recoverable reserves. The real measure of Samudra Manthan will therefore not be how many wells are drilled or how much money is allocated, but how much of the identified resource ultimately reaches production.
A decade of reforms meets mission-mode spending
Samudra Manthan is also the latest layer in a broader transformation of India’s upstream oil and gas sector.
The government has introduced the Hydrocarbon Exploration and Licensing Policy and Open Acreage Licensing Programme, moved from Production Sharing Contracts to Revenue Sharing Contracts, opened previously restricted offshore acreage and introduced further regulatory changes through the Oilfields (Regulation and Development) Amendment Act, 2025 and the Petroleum and Natural Gas Rules, 2025.
The data suggests activity has increased. According to the government, 172 OALP blocks covering nearly 3.8 lakh square kilometres have been awarded, with committed investments exceeding $4.3 billion. Around 674 wells were drilled in FY2025-26, resulting in five new discoveries and the monetisation of seven discoveries.
The first appraisal well in the Mahanadi Offshore Basin, which began drilling on July 25, 2026, offers an early test of this new phase. The MN-DWN18-1-HD well is the first of four planned deepwater wells in the basin.
The real test begins beneath the waves
Samudra Manthan is ambitious because it attempts to tackle several constraints at once: geological uncertainty, high drilling costs, limited deepwater expertise, inadequate infrastructure and dependence on imported offshore equipment.
If successful, it could do more than add barrels and gas molecules to India’s domestic supply. It could create a deeper offshore services industry, attract private and international capital, improve technological capabilities and provide a larger buffer against global energy shocks.
But the government is effectively making a long-term wager. Offshore exploration operates on a very different timetable from policymaking: capital is committed today, wells are drilled over several years and commercial production may arrive much later.
That makes execution critical
The success of Samudra Manthan will ultimately depend on whether India can convert its newly opened offshore acreage and large estimated resource base into discoveries, discoveries into commercially viable projects, and projects into sustained domestic production.
For a country exposed to global oil prices and geopolitical supply disruptions, that conversion — not the size of the headline allocation — will determine whether Samudra Manthan becomes a genuine energy-security strategy or simply an expensive exploration programme.
