Cabinet Clears Rs 84,084-Crore 'Samudra Manthan' Scheme To Boost Offshore Oil, Gas Exploration

The Union Cabinet on Friday approved the Rs 84,084-crore ‘Samudra Manthan’ National Offshore Exploration Scheme, a major initiative aimed at increasing India’s domestic oil and gas production by supporting exploration in deepwater and ultra-deepwater areas. The scheme is expected to reduce the country’s dependence on imported crude oil and natural gas while attracting fresh investments into the energy sector.

The Central Sector Scheme, to be implemented by the Ministry of Petroleum and Natural Gas until FY 2030-31, will provide financial assistance for offshore exploration, scientific drilling, seismic surveys and the development of production infrastructure, according to an official statement.

As part of the programme, the government will provide

up to Rs 650 crore for every exploratory well drilled in deepwater and ultra-deepwater regions. These projects involve high costs and significant geological risks, as many exploratory wells do not lead to commercially viable discoveries.

How the Rs 84,084-Crore Outlay Will Be Spent

Of the total allocation, Rs 43,200 crore has been earmarked over the next five years to support deepwater drilling. Another Rs 10,000 crore will be used to partially fund common offshore infrastructure required to bring newly discovered oil and gas reserves into production.

The scheme also allocates Rs 28,534 crore for offshore data acquisition and Rs 2,000 crore to establish oil and gas manufacturing and services zones that will support the exploration and production ecosystem.

Officials said drilling in ultra-deepwater areas, where water depths exceed 1,500 metres, can cost anywhere between USD 100 million (around Rs 950 crore) and USD 250 million (about Rs 2,400 crore) for a single well, without any guarantee of discovering commercially viable reserves.

Reducing India’s Dependence On Energy Imports

The government believes the scheme will speed up exploration in offshore basins, unlock India’s hydrocarbon resources and encourage greater investment in the sector.

India currently imports around 88 per cent of its crude oil requirements, up from 77 per cent a decade ago. The country also depends on imports for nearly half of its natural gas consumption, which is widely used for fertiliser production, electricity generation, CNG vehicles and piped cooking gas.

The recent conflict in West Asia, which disrupted global energy supplies, has further underlined the importance of strengthening India’s domestic energy production and reducing its reliance on imports.

Government Expects Fresh Discoveries And More Investment

According to the government, the scheme will support large-scale seismic surveys, exploratory drilling in deepwater and ultra-deepwater regions, scientific drilling in frontier basins and the creation of common offshore production and evacuation infrastructure.

The programme also includes plans to develop an integrated oil and gas manufacturing and services zone, alongside investments in digital programme management, advanced technologies, capacity building, stakeholder engagement and international collaboration.

India’s domestic oil and gas production has remained under pressure due to declining output from ageing fields and limited exploration in frontier basins. Officials estimate that the initiative could help discover more than 600 million tonnes of oil equivalent (MMTOE) of hydrocarbon reserves, besides generating employment, strengthening domestic manufacturing and attracting investments across the exploration and production value chain.

Scheme Builds On Recent Oil And Gas Reforms

The approval follows a series of reforms introduced in the upstream oil and gas sector over the past decade. These include opening almost the entire offshore acreage for exploration, modernising the legal and contractual framework and strengthening the National Data Repository.

The idea for the ‘Samudra Manthan’ scheme was first announced by Prime Minister Narendra Modi during his Independence Day address in 2025, when he called for a modern-day effort to unlock India’s offshore energy resources.

India has also overhauled its exploration policy several times since 1997. The Hydrocarbon Exploration and Licensing Policy (HELP), introduced in 2016, replaced Production Sharing Contracts with Revenue Sharing Contracts and brought in the Open Acreage Licensing Policy, allowing companies to propose exploration blocks throughout the year.

More recently, the government introduced a hybrid bidding model for underexplored basins and implemented the Oilfields (Regulation and Development) Amendment Act, 2025, which came into force in April. The law introduced a single petroleum lease, graded royalty provisions and legal safeguards, supporting the launch of 50 new exploration blocks under OALP, small-field and coal-bed methane bidding rounds in December 2025.