What is the Samudra Manthan scheme all about? | Explained

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

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.

Primary/reference source: Economy