Cabinet Approves Rs 84,084 cr Samudra Manthan Scheme To Explore Offshore Oil And Gas Exploration
The government further said that the ‘Samudra Manthan’ scheme under the ministry of petroleum and natural gas, is expected to catalyse reserve accretion of over 600 million metric tonnes of oil equivalent (MMTOE), substantially increase offshore exploration activity, promote higher domestic oil and gas production, and generate large-scale employment, among other objectives
New Delhi: Amid the ongoing Middle East crisis, the Union Cabinet on Friday cleared the ‘Samudra Manthan’ National Offshore Exploration Scheme, with an outlay of Rs 84,084 crore for implementation up to fiscal 2030-31. The move of the government aims to substantially increase seaward activity with its biggest investments in offshore oil and gas exploration as it looks to strengthen India’s energy security and reduce dependence on imports.
The government further said that the ‘Samudra Manthan’ scheme under the ministry of petroleum and natural gas, is expected to catalyse reserve accretion of over 600 million metric tonnes of oil equivalent (MMTOE), substantially increase offshore exploration activity, promote higher domestic oil and gas production, and generate large-scale employment, among other objectives.
Speaking to the media after the cabinet meeting, Union minister Ashwini Vaishnaw said that the scheme is aimed at the exploration for oil and gas production in the country. terming it a 'major game-changer' amid the rising demand for oil and gas in India, the minister said that the scheme will help in saving a lot of foreign exchange. The government, however, said that the scheme is also expected to stimulate significant investments across the exploration and production value chain, creating long-term opportunities for industry, innovation and economic growth.
Vaishnaw further said that within India’s exclusive economic zone (EEZ), the area of the sea over which India has sovereign rights and privileges, there are significant reserves of hydrocarbons, including oil and natural gas. “If these resources are properly explored, India can substantially increase its domestic production. Keeping this objective in mind, a comprehensive programme has been designed for both exploration and subsequent production and named Samudra Manthan,” he said.
Under the scheme, the government also said that it would partly fund the high cost of finding oil and gas in deepwater areas, drilling exploratory wells and building common infrastructure to bring new discoveries into production. “The government will provide support of up to Rs 650 crore for each well drilled in deep-sea and ultra-deep-sea areas, as part of efforts to boost domestic oil and gas output and reduce reliance on imports,” the officials said.
“More than Rs 43,200 crore out of the total outlay, will be allocated over five years through 2031 to support deep-sea drilling, an activity involving high costs and significant geological risks as not every exploratory well results in a commercial discovery. Another Rs 10,000 crore has been earmarked to partially fund common infrastructure needed to bring discovered oil and gas reserves into production. The scheme also provides Rs 28,534 crore for offshore data acquisition and Rs 2,000 crore for developing oil and gas manufacturing and services zones,” they said.
As per the government’s estimate, drilling in ultra-deepwater areas, where water depths exceed 1,500 metres, can cost between Rs 950 crore and Rs 2,400 crore ($100 - $250 million) per well, with no certainty that the investment will result in a discovery or contribute to higher domestic production. “However, the government expects the scheme to accelerate exploration in offshore basins, attract investment and help unlock India's offshore hydrocarbon potential,” an official statement said.
India’s reliance on imported crude oil, the key raw material used to produce fuels such as petrol and diesel, has increased over the past decade from 77 per cent to 88 per cent. The country also imports around half of its natural gas requirements, which is used in sectors including fertiliser production, power generation, compressed natural gas for vehicles and piped cooking gas supplies to households. “The recent conflict in West Asia, however, highlighted the vulnerability of import-dependent economies and renewed focus on strengthening domestic production capacity,” the government said.
“The programme also provides for the creation of an integrated oil and gas manufacturing and services zone, along with investments in digital programme management, technology adoption, capacity building, stakeholder engagement and international collaboration to support offshore exploration and production. The scheme is aimed at supporting seismic surveys, deepwater and ultra-deepwater drilling, exploration in frontier basins and the creation of common offshore production and evacuation facilities,” it added.
