What is the Samudra Manthan scheme all about? | Explained

Published 2026-08-03 · Updated 2026-08-03 · 3 min · 529 words

What does this development mean for UPSC preparation?

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

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

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

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

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

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

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.

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

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

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.

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.

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.

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.

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

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.

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.

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.

Primary/reference source: thehindu.com