The Union Cabinet approved the ‘Samudra Manthan’ National Offshore Exploration Scheme on August 1, 2026, sanctioning an outlay of ₹84,084 crore to accelerate oil and gas exploration in India’s offshore basins through FY2030-31. The Samudra Manthan scheme is designed to boost domestic energy production and reduce India’s dependence on crude oil imports, which currently account for more than 85% of the country’s consumption.
Under the scheme, the government will fund exploratory drilling in offshore blocks, providing financial support of up to ₹650 crore per well to bring down the high upfront risk that has historically discouraged private and public players from bidding on deepwater and ultra-deepwater blocks. The Ministry of Petroleum and Natural Gas will implement the scheme alongside ONGC and other exploration and production companies operating under the Open Acreage Licensing Policy (OALP).
How Will Samudra Manthan Affect India’s Energy Security?
India imports roughly 88% of its crude oil requirement, a dependence that has repeatedly exposed the economy to currency and current-account pressure whenever global oil prices spike. By de-risking offshore exploration with a dedicated ₹84,084 crore fund, the government aims to unlock previously unviable deepwater reserves in basins such as the Krishna-Godavari and Mumbai offshore areas. Officials estimate the scheme could help India lift domestic crude and natural gas output meaningfully over the next five years, directly supporting the National Manufacturing Mission’s push for cheaper, locally sourced energy inputs for industry.
What Do Analysts and Industry Bodies Say?
Energy sector analysts have described the per-well funding support as a structural fix for India’s chronically low exploration success rate, which has lagged mature offshore basins globally due to high costs and thin private participation. Industry body FICCI has said risk-sharing mechanisms of this kind are essential to attract global exploration and production majors back into Indian waters after several licensing rounds saw muted bidding in the past decade. Some economists have cautioned that offshore exploration has long gestation periods, meaning any meaningful production increase from Samudra Manthan-funded wells is unlikely before the early 2030s.
Market and Trade Reaction
Shares of oilfield services companies and ONGC gained on the announcement, as investors priced in a multi-year pipeline of drilling contracts funded under the new scheme. The rupee, sensitive to crude oil import bills, saw a marginal positive reaction, with traders citing the scheme as a long-term structural positive for India’s current account even though near-term import dependence remains unchanged. Oil and gas equipment manufacturers and drilling contractors are expected to be direct beneficiaries as exploration activity picks up.
What Happens Next?
The Ministry of Petroleum and Natural Gas is expected to notify detailed scheme guidelines and well-selection criteria in the coming weeks, followed by an invitation for exploration proposals under the next OALP bidding round. Progress on the scheme will likely be reviewed as part of upcoming Union Budget exercises through FY31, alongside India’s broader energy security roadmap.
Frequently Asked Questions
What is the outlay for the Samudra Manthan scheme?
The Union Cabinet has approved a total outlay of ₹84,084 crore for the Samudra Manthan National Offshore Exploration Scheme, to be implemented through FY2030-31.
How much funding support will each offshore well receive?
The government will fund up to ₹650 crore per well to help offset the high upfront cost of offshore exploratory drilling.
Why did the government launch this scheme?
India imports about 85-88% of its crude oil needs; Samudra Manthan aims to boost domestic offshore exploration and reduce this import dependence over the long term.
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