Cabinet Approves ₹84,084 Crore 'Samudra Manthan' Offshore Exploration Scheme
2-minute summary
The Union Cabinet has approved an outlay of ₹84,084 crore for the Ministry of Petroleum and Natural Gas’s flagship National Offshore Exploration Scheme, titled 'Samudra Manthan', running through fiscal year 2030-31. The scheme aims to enhance India's domestic energy security by discovering reserves exceeding 600 million metric tonnes of oil equivalent (MMTOE) and reducing reliance on mature, declining onshore fields. The financial corpus is distributed across four critical pillars: ₹43,200 crore to support drilling 60 deepwater exploration wells (covering up to 50% of drilling costs or ₹675 crore per well); ₹28,534 crore for offshore data acquisition; ₹10,000 crore for common offshore infrastructure hubs to enable commercialization; and ₹2,000 crore to set up oil and gas manufacturing and service zones for domestic equipment localization. By undertaking large-scale seismic surveys and subsidizing high-risk deepwater exploratory drilling, the government seeks to reduce geological uncertainty and incentivize private investment across the upstream hydrocarbon value chain.
Why it's in the news
The Union Cabinet has sanctioned ₹84,084 crore for the 'Samudra Manthan' National Offshore Exploration Scheme till FY 2030-31. The decision aims to catalyze deepwater exploration, derisk private investment, and boost domestic oil and gas production.
Background and context
India relies on imports for over 85% of its crude oil and nearly 50% of its natural gas needs, exposing the economy to international price volatility and geopolitical risks. Legacy domestic fields such as Mumbai High are experiencing natural production declines due to maturity. While India's deepwater and ultra-deepwater offshore basins—such as the Krishna-Godavari and Mahanadi basins—hold substantial hydrocarbon potential, deepwater drilling involves high capital expenditures, complex technologies, and significant geological risks. Previous policy interventions like the Hydrocarbon Exploration and Licensing Policy (HELP) and Open Acreage Licensing Policy (OALP) introduced unified licensing and revenue-sharing terms to attract private players. However, high initial exploratory costs remained a key bottleneck. The 'Samudra Manthan' scheme addresses this structural barrier by offering financial risk-sharing for exploratory drilling, subsidizing basin-wide seismic data collection, and developing shared offshore facilities.
Constitutional provisions
- Article 297 — States that all lands, minerals, and other things of value underlying the ocean within the territorial waters, continental shelf, or Exclusive Economic Zone (EEZ) of India vest in the Union.
Committees and reports
- Kirit Parikh Committee — Recommended pricing reforms for domestic gas to incentivize upstream production while protecting consumer interests.
- Vijay Kelkar Committee — Formulated a roadmap for enhancing domestic production of oil and gas and recommended moving to a revenue-sharing model.
Government schemes
- Hydrocarbon Exploration and Licensing Policy (HELP) / OALP — Provides a unified licensing system and open acreage options for conventional and unconventional hydrocarbon exploration.
- Deep Ocean Mission — Focuses on deep-sea technology development, exploration of ocean resources, and ocean conservation.
International organisations
- International Energy Agency (IEA) — Tracks global energy demand, market balances, and energy transition strategies impacting major oil importers like India.
- United Nations Convention on the Law of the Sea (UNCLOS) — Defines sovereign rights and responsibilities of nations regarding sovereign exploitation of Exclusive Economic Zones (EEZ) and continental shelves.
Previous UPSC questions on this theme
- Mains GS-3 2018 — "Access to affordable, reliable, sustainable and modern energy is the sine qua non to achieve Sustainable Development Goals (SDGs)." Comment on the progress made in India in this regard.
Mains practice: Examine the significance of the 'Samudra Manthan' scheme in boosting India's energy security and de-risking upstream offshore exploration. What key challenges must be addressed for its effective implementation?
India imports over 85% of its crude oil requirements, leaving its current account balance and macroeconomic stability vulnerable to global energy price shocks. The Cabinet's approval of the ₹84,084 crore 'Samudra Manthan' (National Offshore Exploration Scheme) serves as a strategic policy shift to unlock domestic deepwater hydrocarbon reserves.
Significance of the Scheme:
• De-risking Deepwater Exploration: High capital intensity deters private players. By subsidizing up to 50% of eligible drilling costs (capped at ₹675 crore per well), the scheme absorbs initial geological risks.
• Resolving Data Asymmetry: An allocation of ₹28,534 crore for offshore data acquisition helps build high-quality seismic databases, improving bid quality under the Open Acreage Licensing Policy (OALP).
• Infrastructure and Local Manufacturing: Dedicated funds for common offshore hubs (₹10,000 crore) and service zones (₹2,000 crore) reduce operational expenditure and promote localization under 'Make in India'.
• Offsetting Ageing Fields: It enables exploitation of untapped deepwater basins (e.g., Mahanadi and KG Basin) to compensate for production declines in legacy onshore fields.
Implementation Challenges:
• Technological Dependence: Ultra-deepwater operations require specialized drillships and deep-sea technologies largely controlled by global oilfield service companies.
• Environmental Risks: Marine offshore drilling carries risks to fragile oceanic ecosystems, necessitating rigorous marine environmental impact assessments.
• Alignment with Decarbonization: Long-term fossil fuel infrastructure investments must be balanced with India's Net Zero targets by 2070.
Conclusion:
'Samudra Manthan' is a critical interim intervention for energy self-reliance. Its long-term success depends on streamlined regulatory approvals, robust technological partnerships, and maintaining environmental safeguards.
Prelims practice questions
Q1. Under the 'Samudra Manthan' scheme, which component has been allocated the largest share of the financial corpus?
- Establishment of oil and gas manufacturing zones
- Development of common offshore infrastructure hubs
- Offshore seismic data acquisition
- Drilling deepwater exploration wells
Answer: D. Out of the total outlay of ₹84,084 crore, the largest portion (₹43,200 crore) is allocated specifically for drilling 60 deepwater exploration wells.
Q2. With reference to Article 297 of the Constitution of India, consider the following statements: 1. All lands, minerals, and other things of value underlying the ocean within the territorial waters or Exclusive Economic Zone (EEZ) of India vest in the Union. 2. The specific breadth limits of the territorial waters and EEZ are explicitly detailed within the text of Article 297 itself. Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Answer: A. Statement 1 is correct (Article 297 vests these ocean resources in the Union). Statement 2 is incorrect because Article 297 states that the limits of territorial waters, continental shelf, and EEZ are determined by laws made by Parliament (such as the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976), not detailed inside the article text itself.
Q3. What is the primary target for hydrocarbon reserve discovery set under the 'Samudra Manthan' scheme?
- 100 million metric tonnes of oil equivalent (MMTOE)
- More than 600 million metric tonnes of oil equivalent (MMTOE)
- 1,000 million metric tonnes of oil equivalent (MMTOE)
- 300 million metric tonnes of oil equivalent (MMTOE)
Answer: B. The Union government's flagship 'Samudra Manthan' scheme aims at catalysing hydrocarbon reserves of more than 600 million metric tonnes of oil equivalent (MMTOE).
Revision flashcards
- What is the total financial outlay approved for the 'Samudra Manthan' scheme and its operational period? ₹84,084 crore approved for implementation until fiscal year 2030-31.
- What level of financial support does the 'Samudra Manthan' scheme provide for exploratory deepwater wells? Up to 50% of eligible drilling costs, capped at ₹675 crore per well, covering 60 deepwater exploration wells.
- What are the four main components of the 'Samudra Manthan' financial allocation? 1. Deepwater drilling (₹43,200 cr) 2. Offshore data acquisition (₹28,534 cr) 3. Common offshore infrastructure hubs (₹10,000 cr) 4. Manufacturing and service zones (₹2,000 cr).
- Which ministry implements the 'Samudra Manthan' scheme? Union Ministry of Petroleum and Natural Gas.
- How does 'Samudra Manthan' aim to de-risk private upstream investments? By co-funding high-risk deepwater exploratory drilling and acquiring comprehensive offshore seismic data to reduce geological uncertainty.