India’s energy security imperative: A case for aggressive domestic exploration

Every dollar increase in crude oil prices adds approximately $1.75 billion to India’s Current Account Deficit. When crude moved from ~$65 before the conflict to ~$100 today, that translates to an incremental burden of over $60 billion—and that figure doesn’t even account for the cascading impact of elevated natural gas prices.

This is not merely macroeconomic statistics. It represents a structural vulnerability that constrains fiscal headroom, weakens the rupee, and ultimately limits India’s developmental ambitions.

Why this matters now more than ever

The war has crystallised a truth that policymakers can no longer defer: energy security is national security. Yet with overall industrial electrification at just 18%, the transition away from hydrocarbons will be generational, not overnight. Oil and gas will remain a cornerstone of India’s primary energy mix for decades to come—and every barrel we don’t produce domestically is a barrel we import, at the mercy of geopolitics and commodity cycles.

The imperative, therefore, is clear: find more, faster, at home.

The prize beneath our feet—and our waters

The Directorate General of Hydrocarbons estimates India’s overall reserves at 12 billion barrels. Assuming that figure holds, the opportunity is substantial. The question is not whether the resources exist—it is whether we have the will and the ecosystem to unlock them.

That ecosystem rests on four pillars:

1. Risk capital—funding the frontier: The honest truth is that the next transformational discovery for India is unlikely to come from onshore. Hope of a major find in the Himalayan foothills, while not entirely extinguished, is fading. Onshore exploration may sustain existing production curves—it will not bend them upwards. The answer lies offshore. And offshore is expensive.

A single deepwater well can cost $200-250 million. With a historical success rate of around 10%, the economics demand scale and diversification of risk. To execute a campaign of the ambition envisioned under GoI’s Samudra Manthan—roughly 150 wells—India needs $3-4 billion in committed capital, of which up to 90% is pure risk capital.

This cannot sit on the balance sheets of NOCs alone. India must attract international E&P majors and independent operators through compelling fiscal terms, create mechanisms for pooling capital between NOCs to share risk, and structure Production Sharing Contracts that are genuinely competitive on a global stage. Capital is mobile—it will go where the terms and the geology reward the risk.

2. Data—de-risking the drill bit: Exploration without data is guesswork at $200 million a well. The single most effective way to improve capital efficiency and reduce dry hole risk is to invest aggressively in subsurface data—before a single well is drilled.

There are two levels of seismic acquisition:

• 2D seismic—analogous to a basic X-ray: useful for basin-level mapping but insufficient for prospect definition

• 3D seismic—analogous to a high-resolution CT scan: essential for identifying drillable prospects with confidence

India must mandate 3D seismic coverage across all category I, II, and III basins. 2D alone is searching for a pin in a haystack. Without 3D data of sufficient quality and density, we are not de-risking exploration — we are simply spending more slowly on the same uncertainty.

A national data acquisition programme, potentially co-funded by government and industry, should be a prerequisite to the next licensing round—not an afterthought.

3. World-class services—The execution layer: Having capital and data means nothing if you cannot execute. Offshore exploration at scale requires a sophisticated and deep services ecosystem—drilling contractors, seismic acquisition vessels, well logging specialists, subsea engineering firms, and the logistical infrastructure to support sustained campaigns in remote and deepwater environments.

India's domestic oilfield services sector, while growing, is not yet equipped to absorb a campaign of this magnitude alone. The risk is real: without adequate services capacity, timelines stretch, costs inflate, and the exploration window narrows.

The solution requires action on two fronts. First, India must actively court the global tier-one services majors—SLB, Halliburton, Baker Hughes—with clear visibility of the exploration pipeline, long-term contract structures, and a stable regulatory environment that justifies their capital deployment. Predictability is the currency that attracts world-class operators.

Second, this is an opportunity to deliberately build domestic services capability. Joint ventures, technology transfer agreements, and mandatory local content requirements—structured intelligently, not punitively — can ensure that the next exploration super-cycle seeds a lasting industrial ecosystem in India. The goal is not just to find oil and gas. It is to build the institutional muscle to keep finding it.

4. Inter-ministerial coordination—the invisible bottleneck: Of the four pillars, this is perhaps the least glamorous and the most consequential. India’s exploration history is littered with blocks that were licensed but never drilled, data that was acquired but never acted upon, and investments that stalled not because of geology or economics—but because clearances didn’t come, ministries didn’t align, and bureaucratic friction compounded until the opportunity window closed.

An offshore exploration campaign of the scale envisioned under Samudra Manthan will touch the Ministry of Petroleum and Natural Gas, the Ministry of Finance, the Ministry of Environment, Forest and Climate Change, the Ministry of Defence, the Ministry of Ports, Shipping and Waterways, and the Ministry of External Affairs—among others. Each has legitimate equities. Each operates on its own timeline and incentive structure.

Without a dedicated coordination architecture—a empowered inter-ministerial task force with a clear mandate, a single point of accountability, and the political weight to resolve conflicts—the campaign will fragment. Approvals will queue. Investors will wait. And the $60 billion import burden will keep compounding.

The model exists in other domains. India's infrastructure push under PM Gati Shakti demonstrated what coordinated multi-ministry execution can achieve. The same logic, the same urgency, and ideally the same institutional scaffolding must be applied to the exploration agenda.

The moment is now

India finds itself at an inflection point. The war has exposed the true cost of energy dependence. The geology, by most credible estimates, offers a genuine prize. The policy framework, through OALP and Samudra Manthan, has begun to take shape. What remains is the hardest part: sustained, coordinated execution at a scale India's upstream sector has never attempted.

The rocks and basins of the Indian subcontinent and its surrounding waters hold a potential answer to one of our most pressing strategic vulnerabilities. But geology does not wait for consensus. Capital does not wait for clearances. And the $100-a-barrel world is not going to become more forgiving.

The window is open. The question is whether India will step through it.

(The author is managing director and partner, BCG India. Views are personal.)