Cabinet approves Samudra Manthan offshore exploration scheme (₹84,084 crore)

Samudra Manthan: what happened?

India is the world’s third-largest consumer of crude oil, and its annual import bill is nearly USD 144 billion (about ₹13 lakh crore), the Ministry says. Most of the hope for new oil and gas lies under the sea, in deep and ultra-deep water. Drilling there is costly and risky, so private firms hold back. Samudra Manthan uses public money to share that risk. The PM spoke of a modern-day Samudra Manthan from the Red Fort on Independence Day 2025.

• The scheme covers the whole offshore chain: seismic data, deepwater drilling, scientific drilling in frontier basins, common production infrastructure and an Oil and Gas Manufacturing and Services Zone.
• Government support for a deepwater well is up to 50% of eligible drilling cost or ₹675 crore per well, whichever is lower.
• It is open to both public and private exploration and production (E&P) operators.
• Extra output could cut crude imports by nearly ₹1 lakh crore a year.

Why are the seas the key for India?

• India’s future oil and gas potential lies largely in deepwater and ultra-deepwater basins: Krishna-Godavari, Cauvery, Mahanadi and the Andaman region.
• One deepwater exploratory well costs about USD 125 to 150 million.
• It takes 5 to 10 years from award of a block to commercial production.
• Existing fields lose around 6 to 7 per cent of output every year, so new finds are needed just to stand still.
• Many discoveries in the Mahanadi and Kutch basins remain unproduced because offshore infrastructure is costly.

What reforms came before it?

• More than 99% of the old “No-Go” offshore areas were removed, opening over one million square kilometres of the EEZ.
• The Hydrocarbon Exploration and Licensing Policy (HELP) came in 2016, and under it the Open Acreage Licensing Programme (OALP) replaced the nomination-based approach.
• India moved from Production Sharing Contracts to Revenue Sharing Contracts in 2016.
• The Oilfields (Regulation and Development) Amendment Act, 2025 and the Petroleum and Natural Gas Rules, 2025 modernised the law.
• ONGC and Oil India now have performance targets tilted towards exploration.

Which Article of the Constitution covers offshore oil?

• Article 297: all lands, minerals and other things of value under the ocean within the territorial waters, the continental shelf or the exclusive economic zone of India vest in the Union.
• Union List (List I), Entry 53: regulation and development of oilfields and mineral oil resources; petroleum and petroleum products.
• So offshore oil and gas is a Union subject, and the Union runs this scheme.

Where does the ₹84,084 crore go?

How does Samudra Manthan work?

1. 2D and 3D seismic surveys map the seabed
2. Old NDR data re-processed with AI tools
3. Drill-ready prospects offered to E&P operators
4. Government shares up to 50% of deepwater well cost
5. Common hubs turn finds into producing fields

Why does Samudra Manthan matter?

What are the challenges in Samudra Manthan?

• Every target is “subject to exploration success”; dry wells are common in deep water.
• Long gestation: 5 to 10 years from block award to production.
• The ₹675 crore per-well cap may cover only part of a USD 125 to 150 million well.
• Finds stay idle without evacuation infrastructure, as in the Mahanadi and Kutch basins.

What should be done next on Samudra Manthan?

• Finish the seismic surveys early so drill-ready prospects reach bidders.
• Use the common hubs to bring stranded finds into production.
• Track reserve accretion against the 600 MMTOE goal every year.
• Build local suppliers through the manufacturing zone.

What can Prelims ask on Samudra Manthan?

• Samudra Manthan: National Offshore Exploration Scheme; Central Sector Scheme of MoPNG; ₹84,084 crore; approved 31 July 2026.
• 60 deepwater wells; support up to 50% of cost or ₹675 crore per well.
• Target: over 600 MMTOE reserves; output 62 to 80 MMTOE a year.
• HELP and OALP: 2016; PSC replaced by Revenue Sharing Contracts.
• Article 297: seabed resources of the EEZ vest in the Union.

How to write about Samudra Manthan in Mains

Practice question (15 marks, 250 words): India’s energy security depends on opening up its offshore basins. Examine how the Samudra Manthan scheme seeks to de-risk deepwater exploration, and its limits.

• Intro: import bill near USD 144 billion; ₹84,084 crore scheme.
• Problem: deepwater cost, long gestation, field decline.
• Design: data, risk-sharing on 60 wells, common hubs, manufacturing zone.
• Limits: exploration success, per-well cap, timelines.
• Conclusion: link to HELP and OALP reforms and Atmanirbhar Bharat.