New Delhi: The Union Cabinet has approved 'Samudra Manthan,' the National Offshore Exploration Scheme, with an outlay of Rs 84,084 crore to be implemented up to FY2030-31, the government said in a statement on Friday. The central sector scheme of the Ministry of Petroleum and Natural Gas (MoPNG) is aimed at accelerating offshore oil and gas exploration and lifting domestic production.
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The decision lands as India's crude import costs have climbed steeply. The country relies on imports for over 88 percent of its crude oil, and in the first quarter of the current financial year, its crude import bill rose more than 60 percent year-on-year to USD 49.8 billion even as import volumes slipped 4.5 percent, as the West Asia crisis and disruptions in the Strait of Hormuz tightened supply and lifted prices. The average landed price of imported crude rose to about USD 113 a barrel in the June quarter, from around USD 67 a year earlier. The Strait of Hormuz was effectively closed from late February, in what the International Energy Agency (IEA) called the largest supply disruption in the history of the global oil market.
Announcing the scheme, Information and Broadcasting Minister Ashwini Vaishnaw tied it to conserving foreign exchange. The scheme "will help India save a significant amount of foreign exchange," he said, describing higher domestic output as one of two strategies to do so — the other being the electrification of transport. With implementation running to FY2030-31, and offshore exploration-to-production cycles typically spanning years, the scheme is a long-horizon effort rather than near-term relief.
Vaishnaw said India's Exclusive Economic Zone "contains significant reserves of hydrocarbons, gas, and oil," and that "proper exploration of this zone could lead to substantial domestic production." He said that "given the rising demand for oil and gas in India, this scheme and programme will prove to be a major game-changer and a new milestone."
Vaishnaw set out the scheme's structure at the briefing. The first component is offshore seismic data acquisition, at Rs 28,000 crore, to map where oil and gas are likely to lie beneath the seabed. The second is the Accelerated Offshore Exploration Scheme, at Rs 43,200 crore, covering the drilling that follows. A further component funds infrastructure-led production in areas where wells have been discovered but output is held back for want of infrastructure, Vaishnaw said, naming the Mahanadi and Kutch basins. Another component covers oil and gas manufacturing and service zones for processing extracted crude and gas. The government statement additionally lists scientific drilling in frontier basins, common offshore production and evacuation infrastructure, and provisions for digital programme management, capacity building and international outreach.
The government statement said the scheme is expected to catalyse reserve accretion of over 600 million tonnes of oil equivalent (MMTOE). Asked separately for an estimate of the reserves in the zone, Vaishnaw said the ministry's team "indicates a range of 1 billion to 1.6 billion tonnes of oil equivalent," a measure of the resource potential rather than the accretion the scheme targets.
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Key questions on how the scheme will operate remain open. On whether private companies, and not only public sector undertakings, would take part, and on what incentives would be offered, Vaishnaw said the incentive structure, the operating mechanism and the question of private participation "will all be revealed once the ministry announces the comprehensive details of the scheme."
The government said the scheme translates the Prime Minister's vision, set out in his Independence Day address from the Red Fort in 2025, of a "modern-day Samudra Manthan" to tap India's offshore energy. It said Samudra Manthan builds on the past decade's upstream reforms — opening almost the entire offshore acreage for exploration, revising the legislative and contractual framework, and strengthening the National Data Repository. The government linked the scheme to its stated goal of a developed India, or 'Viksit Bharat'.
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