India has unveiled a massive ₹80,000 crore war chest under the Samudra Manthan program to finally crack deep water oil exploration, offering to fund up to half the cost of wells that can exceed ₹1,000 crore each.

This marks a strategic shift from penalising companies for under‑drilling to the government sharing financial risk directly, with ONGC already spudding its first appraisal well in the Mahanadi basin.

India is launching this initiative to reduce its heavy dependence on imported crude oil, which currently stands at around 85% of consumption. Deep water reserves are seen as one of the few viable levers to alter this equation, given their potential scale and strategic importance.

The Samudra Manthan program is designed to attract both domestic and global energy companies by lowering the financial risks associated with offshore exploration.

The government has extended bidding under the Open Acreage Licensing Program until 17 September 2026, offering 18 deep and ultra‑deep water blocks for exploration. These blocks are located across frontier basins with significant geological promise. The extension allows investors more time to evaluate the benefits of the new incentive scheme and align their bids with the financial support now on offer.

Drilling a single deep water well in India costs between ₹1,000 crore and ₹1,200 crore, while ultra‑deep water wells can cost even more. Such high costs have historically deterred foreign firms, especially given India’s modest exploration success in deep waters.

By reimbursing up to 50% of drilling costs and partly funding 3D seismic surveys, the government aims to de‑risk exploration and encourage wider participation. Funding per well will be capped to prevent cost overruns, ensuring fiscal discipline while still offering meaningful support.

The incentives are available to both state‑run enterprises and private explorers. ONGC has already spudded its first deep water exploratory well under the Samudra Manthan umbrella, signalling early momentum.

This marks a departure from the earlier minimum work program regime, where companies were penalised for not drilling mandatory wells despite prohibitive costs. Now, the government is directly sharing the burden, making exploration more commercially viable.

Beyond financial support, the government is also modernising geological datasets. Legacy 2D seismic data is being reprocessed using advanced imaging technologies, and new 3D surveys are planned.

This will provide clearer subsurface images, refine drilling targets, and improve geological models, thereby enhancing the chances of successful discoveries.

The initiative is expected to attract global companies with deep water expertise and advanced technologies. By sharing risks and improving data quality, India hopes to unlock its offshore hydrocarbon potential and strengthen energy security.

The Samudra Manthan program represents one of the most ambitious steps in India’s upstream sector in recent years, aiming to transform exploration dynamics and pave the way for future discoveries.

Agencies