India to fund ₹650 crore per well for 60 deep-sea wells to break its oil import habit

India has launched a groundbreaking program to fund deep-sea and ultra-deepwater oil and gas exploration through its national budget, aiming to reduce its reliance on imported crude and gas. The Union Cabinet approved the ₹84,084-crore Samudra Manthan National Offshore Exploration Scheme, which will provide half of the cost for each deep-sea and ultra-deepwater exploration well, capped at ₹650 crore per well. This marks the first instance of a government funding exploration risk directly from the budget worldwide.

The scheme will support 60 deepwater and ultra-deepwater exploration wells over the next five years, with the government covering the drilling costs and contributing to common infrastructure like subsea pipelines and onshore processing facilities. Private companies have been reluctant to engage in exploration due to the high risk of losing investments if no viable discoveries are made.

Samudra Manthan addresses this issue by allowing eligible companies to claim up to ₹650 crore per deepwater or ultra-deepwater exploratory well.

The program aims to increase India's incremental annual production of 10-15 million tonnes of oil equivalent, reducing import dependence by 3-5%. It will also fund offshore data acquisition, drilling in previously untapped areas, and the development of common infrastructure to facilitate the commercialization of discovered reserves.

The initiative seeks to attract global energy majors, enhance domestic production capacity, and minimize vulnerability to global supply shocks, particularly in light of recent geopolitical tensions. While deep-sea exploration often yields uncertain results, Samudra Manthan represents a strategic long-term bet to unlock India's offshore hydrocarbon potential.