What is the Samudra Manthan scheme all about? | Explained

2026-08-03 · 3 min

Union Cabinet approved ₹84,084 crore for the National Offshore Exploration Scheme 'Samudra Manthan' to boost deepwater hydrocarbon exploration.

## UPSC CSE Context ### Why in News Union Cabinet approved ₹84,084 crore for the National Offshore Exploration Scheme 'Samudra Manthan' to boost deepwater hydrocarbon exploration.

### Syllabus Connection GS Paper 3: Indian Economy – Energy, Infrastructure; GS Paper 1: Geography – Distribution of key natural resources.

### Exam Relevance Relevant for questions on energy security, import dependence, and government schemes to attract investment in capital-intensive sectors.

## Core Issue Government de-risks deepwater exploration with ₹84,084 crore to boost domestic oil and gas output.

### Key Development Scheme allocates ₹43,200 crore for drilling 60 deepwater wells, offering up to 50% cost subsidy to explorers.

### Stakeholders - Ministry of Petroleum and Natural Gas - ONGC - Oil India Limited - Private exploration companies

## Static Knowledge ### High-Value Background - India imports over 85% of its crude oil, making domestic exploration critical for energy security. - Deepwater blocks are offered under the Open Acreage Licensing Policy (OALP) to attract private investment.

### Exam Linkage - Connects to energy security, import bill reduction, and the Hydrocarbon Exploration and Licensing Policy (HELP).

### Concepts in Context - Deepwater and ultra-deepwater refer to water depths beyond 400 meters, requiring advanced technology and higher costs.

## Dynamic Analysis ### Economy - Risk-sharing through cost subsidy can attract private capital into high-risk exploration, reducing fiscal burden on state-owned companies. - Success could lower annual crude import bill by ₹1 lakh crore, improving current account deficit. - Domestic manufacturing zones for oilfield equipment may create backward linkages and reduce import dependency in the oil services sector.

### Energy Security - Aging fields declining at 6-7% annually necessitate new discoveries to maintain production levels. - Increasing domestic output from 62 MMTOE to 80 MMTOE reduces vulnerability to global price shocks and supply disruptions. - Focus on frontier basins like Andaman diversifies geographic risk away from mature western offshore fields.

### Governance - Seismic data acquisition by government reduces information asymmetry, enabling better bid rounds under OALP. - Common offshore infrastructure hubs prevent duplication and lower entry barriers for smaller players. - Scheme design aligns with fiscal consolidation by targeting 2030-31, but cost overruns in deepwater projects remain a risk.

## Mains Value Addition ### Arguments - Government as a risk partner can unlock private investment in technologically challenging deepwater exploration. - Reducing import dependence aligns with the goal of 'Atmanirbhar Bharat' in the energy sector. - Common infrastructure and manufacturing zones can create an ecosystem for long-term cost efficiency.

### Examples - Oil India's gas discovery in Andaman's Vijayapuram-2 and Vijayapuram-3 wells demonstrates frontier basin potential.

### Data Points - Single deepwater exploratory well costs $125-150 million; scheme offers up to ₹675 crore per well subsidy. - Target to increase hydrocarbon resource base from 1.6 billion tonnes to 2.2 billion tonnes of oil equivalent.

### Counterpoints - Long gestation periods (5-10 years) mean results may not be visible before 2030, delaying energy security benefits. - Environmental risks of deepwater drilling, including oil spills, could face regulatory and public opposition.

## Way Forward - Ensure timely environmental clearances and robust safety protocols to mitigate offshore drilling risks. - Link subsidy disbursement to actual drilling milestones to prevent cost overruns and delays. - Strengthen the Directorate General of Hydrocarbons for efficient monitoring of exploration commitments. - Promote technology transfer partnerships with global deepwater operators to build domestic technical capacity. - Integrate the scheme with the National Data Repository to attract more bidders through transparent data sharing.

Source: Economy