The government will share the financial risks of deepwater oil and gas exploration with energy companies under the Rs 84,084-crore Samudra Manthan scheme, offering to fund part of the cost of exploratory drilling, offshore seismic mapping and shared production infrastructure to encourage investment in India's hydrocarbon reserves.
The Ministry of Petroleum and Natural Gas has issued operational guidelines for the programme, which seeks to improve the commercial viability of exploration in deepwater and ultra-deepwater basins, where high drilling costs and uncertain geological prospects have historically constrained investment.
The scheme will run through FY2030-31, with FY2026-27 designated as a preparatory year and expenditure between FY2027-28 and FY2030-31 forming the first phase of implementation.
Petroleum Secretary Neeraj Mittal described Samudra Manthan as "the most ambitious upstream oil and gas intervention undertaken in recent times" and said the programme could add "more than 600 million tonnes of oil equivalent" to India's reserves.
๐๐ผ๐๐ ๐๐ผ ๐ณ๐๐ป๐ฑ ๐ฒ๐ฌ ๐ผ๐ณ๐ณ๐๐ต๐ผ๐ฟ๐ฒ ๐๐ฒ๐น๐น๐
Under the scheme's principal component, financial assistance will be provided for drilling 56 exploratory wells and four stratigraphic wells in deepwater and ultra-deepwater areas.
The guidelines define deepwater areas as those exceeding 400 metres in depth, while ultra-deepwater areas are classified as waters deeper than 1,500 metres.
For the 56 exploratory wells, the government will provide funding covering up to 50 per cent of actual drilling costs, subject to a maximum of Rs 675 crore per well.
The four stratigraphic wells, primarily intended to study underground rock formations and geological structures, will qualify for support of up to 100 per cent of costs, capped at Rs 1,350 crore per well.
However, funding for stratigraphic wells will be available only to state-owned companies or consortia led by public sector enterprises.
At the maximum permissible support levels, government assistance for the 60 wells could reach Rs 43,200 crore, accounting for more than half of the scheme's total outlay.
The operational guidelines, however, do not specify a component-wise allocation of the overall budget.
๐ฃ๐ฎ๐๐บ๐ฒ๐ป๐๐ ๐น๐ถ๐ป๐ธ๐ฒ๐ฑ ๐๐ผ ๐ฑ๐ฟ๐ถ๐น๐น๐ถ๐ป๐ด ๐บ๐ถ๐น๐ฒ๐๐๐ผ๐ป๐ฒ๐
Financial assistance will be released in stages linked to drilling progress rather than being paid entirely in advance.
Operators will receive 40 per cent of the approved assistance once drilling reaches 40 per cent of the sanctioned depth.
The remaining 60 per cent will be released after completion of the well and approval of the final well report.
Eligibility will be restricted to exploration blocks awarded under the Revenue Sharing Contract regime.
Blocks governed by production-sharing contracts and coal-bed methane arrangements will remain excluded unless the government specifically provides otherwise.
Development wells will not qualify for financial assistance, and operators will not be entitled to automatic increases in support if drilling costs exceed approved limits.
Companies will also remain responsible for costs above the prescribed ceilings and could lose eligibility if they fail to fulfil committed drilling obligations.
๐๐ผ๐๐ ๐๐ผ ๐ฟ๐ฒ๐ฐ๐ผ๐๐ฒ๐ฟ ๐ณ๐๐ป๐ฑ๐ถ๐ป๐ด
The guidelines provide a mechanism for the government to recover financial assistance from commercially successful projects.
Recovery will begin after seven years of commercial production or when the operator has recovered 50 per cent of its exploration and development costs, whichever occurs earlier.
The recoverable amount will not be adjusted for inflation.
The arrangement is designed to reduce the initial financial burden on exploration companies while allowing the government to recover its contribution when discoveries move into commercial production.
Operators will nevertheless continue to bear the risk associated with unsuccessful exploration and expenditure exceeding the support limits.
๐ฆ๐ต๐ฎ๐ฟ๐ฒ๐ฑ ๐ผ๐ณ๐ณ๐๐ต๐ผ๐ฟ๐ฒ ๐ถ๐ป๐ณ๐ฟ๐ฎ๐๐๐ฟ๐๐ฐ๐๐๐ฟ๐ฒ
A second component of Samudra Manthan will provide viability gap funding for common infrastructure connecting multiple small or stranded oil and gas discoveries to a single production system.
Eligible infrastructure includes subsea manifolds, trunk pipelines, central processing platforms and shared floating production units.
The support is initially planned for projects in the Mahanadi basin, with token funding earmarked for the Kutch basin.
Project proposals will require appraisal by the Public Investment Board before receiving ministerial approval for expenditure.
The shared infrastructure approach is intended to improve the economics of smaller discoveries that may not independently justify the construction of expensive production facilities.
๐ ๐ฎ๐ป๐๐ณ๐ฎ๐ฐ๐๐๐ฟ๐ถ๐ป๐ด ๐ฎ๐ป๐ฑ ๐๐ฒ๐ฟ๐๐ถ๐ฐ๐ฒ๐ ๐๐ผ๐ป๐ฒ๐
The third component provides for the development of one or more oil and gas manufacturing and services zones equipped with common utilities, testing facilities and certification infrastructure.
The guidelines permit these zones to be developed alongside the BHAVYA industrial infrastructure scheme administered by the Commerce Ministry's trade promotion department.
However, any funding shortfall under BHAVYA will not create an additional financial liability for the Samudra Manthan programme.
๐ข๐๐ฒ๐ฟ๐๐ถ๐ด๐ต๐ ๐ฎ๐ป๐ฑ ๐ถ๐บ๐ฝ๐น๐ฒ๐บ๐ฒ๐ป๐๐ฎ๐๐ถ๐ผ๐ป
An empowered steering committee chaired by the Cabinet Secretary will oversee the programme, while an executive committee headed by the Petroleum Secretary will undertake final appraisals.
A dedicated programme unit under a joint secretary will handle day-to-day monitoring and implementation.
The Directorate General of Hydrocarbons (DGH) will function as the implementing and nodal agency, tracking project progress through a digital monitoring system.
The government expects the programme to encourage exploration in high-risk offshore basins, improve the commercial prospects of smaller discoveries and support domestic oil and gas production as India seeks to reduce its dependence on imported hydrocarbons.