Samudra Manthan: Govt to fund 50% of deepwater well costs, recover money from successful explorers

The Ministry of Petroleum and Natural Gas, in the operational guidelines for the ₹84,084-crore Samudra Manthan scheme issued on October 22, 2026, said the government will bankroll up to 50% of eligible drilling costs for deepwater and ultra-deepwater exploration wells, but recover its assistance from commercially successful projects under specified conditions.

The risk-sharing mechanism is designed to encourage exploration in India’s offshore basins, where a single exploratory well can cost between $125 million and $150 million, while limiting the upfront financial exposure of companies venturing into geologically challenging areas.

Approved on July 31, 2026, the National Offshore Exploration Scheme aims to add more than 600 million tonnes of oil equivalent (MMTOE) to India’s hydrocarbon reserves and potentially save nearly ₹1 lakh crore annually on crude oil imports. Under the operational guidelines, recovery of government assistance will begin after seven years of commercial production or when the operator has recovered 50% of its exploration and development costs, whichever comes first. Assistance for unsuccessful wells will not be recovered.

₹43,200 crore earmarked for 60 deepwater wells

The scheme allocates ₹43,200 crore to support the drilling of 60 deepwater and ultra-deepwater wells. For exploratory wells, government assistance will cover up to 50% of eligible costs, capped at ₹675 crore per well. Four stratigraphic wells, which help establish subsurface geological characteristics, will qualify for support of up to 100% of eligible costs, subject to a ceiling of ₹1,350 crore each.

The funding is intended to address the substantial financial risks associated with offshore exploration and encourage participation from both public and private oil and gas companies. Deepwater projects can take five to ten years to progress from the award of an exploration block to commercial production.

₹28,534 crore for seismic surveys; ₹10,000 crore for infrastructure

The government has earmarked ₹28,534 crore for seismic data acquisition, processing and interpretation, including the use of artificial intelligence to analyse geological data and reprocess older datasets. Another ₹10,000 crore will fund shared offshore infrastructure to reduce development costs and help bring commercially viable discoveries into production.

A further ₹2,000 crore has been allocated for an oil and gas manufacturing and services zone to strengthen domestic capabilities, while ₹350 crore will support programme monitoring, training and related activities.

Domestic production target raised to 80 MMTOE

Samudra Manthan aims to increase annual domestic hydrocarbon production from around 62 MMTOE to nearly 80 MMTOE, while expanding India’s hydrocarbon resource base from approximately 1.6 billion to 2.2 billion tonnes of oil equivalent.

The initiative builds on exploration reforms that have opened more than 99% of previously restricted offshore areas. Under the Open Acreage Licensing Programme, 172 exploration blocks covering nearly 3.8 lakh square kilometres have been allocated, attracting committed investments exceeding $4.3 billion.

However, the scheme’s impact on import dependence will depend on commercially recoverable discoveries, timely infrastructure development and sustained production growth.