Samudra Manthan: National Offshore Exploration Scheme (2026)

Policy Update
Shiva Karthik

Background

India is the world’s third-largest consumer of crude oil, with an annual crude oil import bill of approximately USD 144 billion. Rising energy demand and dependence on imported hydrocarbons make domestic exploration important for strengthening India’s energy security. Although India has undertaken reforms to expand offshore exploration, deepwater and ultra-deepwater exploration remain challenging because of high investment requirements, technological complexity and uncertain returns.

To address these challenges, the Union Cabinet approved Samudra Manthan, the National Offshore Exploration Scheme on 31 July 2026, with an outlay of ₹84,084 crore for implementation up to FY 2030-31. It is a Central Sector Scheme under the Ministry of Petroleum and Natural Gas. The initiative translates the Prime Minister’s vision of a National Deepwater Exploration Mission, articulated on Independence Day 2025, into a mission-mode programme for offshore hydrocarbon exploration. (Press Information Bureau, 2025)

Introduction

Samudra Manthan marks the transition from policy reforms to mission-mode implementation in India’s offshore hydrocarbon exploration and production sector. The scheme adopts a comprehensive approach to strengthening the offshore exploration value chain through strategic public investment, advanced technologies and modern infrastructure. It also aims to create an enabling ecosystem for greater investment and technological advancement in the sector.

By integrating seismic data acquisition, exploratory drilling, common offshore infrastructure and domestic manufacturing, the scheme seeks to accelerate the development of India’s offshore energy resources. It further aims to strengthen indigenous capabilities, encourage investment across the exploration and production value chain, and promote a globally competitive ecosystem for offshore technologies and services.

Performance

The progress of India’s hydrocarbon exploration sector provides the foundation for the implementation of Samudra Manthan. Nearly 81% of India’s active exploration acreage has been awarded since 2014. Under the Open Acreage Licensing Programme (OALP), 172 exploration blocks covering approximately 3.8 lakh square kilometres have been awarded, with committed investments exceeding USD 4.3 billion. During FY 2025-26, approximately 674 wells were drilled, five new discoveries were made and seven discoveries were monetised. These figures reflect the broader progress of India’s exploration sector, rather than achievements exclusively attributable to Samudra Manthan. (PIB, 2026, Mahanadi Appraisal Well)

Under Samudra Manthan, ₹43,200 crore has been allocated for drilling 60 deepwater and ultra-deepwater exploratory wells. The government will provide financial assistance covering up to 50% of eligible drilling costs, subject to a maximum of ₹675 crore per well, whichever is lower. This provision is open to both public and private Exploration and Production (E&P) operators. (PIB, 2026, Samudra Manthan- Churning the Ocean for Energy).

Subject to exploration success, the scheme aims to facilitate an addition of over 600 Million Metric Tonnes of Oil Equivalent (MMTOE) to India’s hydrocarbon reserves. It also projects an increase in annual domestic oil and gas production from approximately 62 MMTOE to 80 MMTOE and a potential reduction in crude oil imports of nearly ₹1 lakh crore annually. These are targets and projected outcomes, not achievements already realised. (PIB, 2026, Mahanadi Appraisal Well)

Functioning

The scheme follows an integrated approach through four major components:

1. Seismic Data Acquisition, Processing and Interpretation: ₹28,534 crore: Conducting large-scale 2D and 3D seismic surveys, improving data processing and interpretation through advanced technologies and Artificial Intelligence, and reprocessing older data available in the National Data Repository (NDR). 

(Operation Guidelines) October, 2026: The 2D programme receives 100% funding of eligible costs, with the resulting data acquired on behalf of the Government. The 3D programme follows a Multi-Client Model.

The Multi-Client Model allows private agencies to acquire and process 3D seismic data by sharing the investment risk, while retaining the ability to market and license the data to multiple interested oil and gas exploration companies.

2. Accelerated Offshore Exploration: ₹43,200 crore: Supporting the drilling of 60 deepwater and ultra-deepwater exploratory wells. Government financial assistance covers up to 50% of eligible drilling costs, subject to a maximum of ₹675 crore per well, whichever is lower. The scheme is open to both public and private Exploration and Production (E&P) operators.

(Operation Guideline) October, 2026: The guidelines provide for 60 wells, including four stratigraphic wells and 56 deepwater and ultra-deepwater wells. The four stratigraphic wells are eligible for 100% of eligible costs, capped at ₹1,350 crore each; the remaining 56 wells receive up to 50% of actual well costs, capped at ₹675 crore per well.

1. Stratigraphic wells: Wells drilled to study underground rock layers and geological formations.

2. Deepwater wells: Offshore wells drilled in water depths of 500–1,500 metres.

3. Ultra-deepwater wells: Offshore wells drilled in water depths exceeding 1,500 metres.

(Operation Guideline) October, 2026: Funding is released in two milestones: 40% when drilling reaches 40% of the approved well depth and 60% after well completion and approval of the completion report.

3. Common Offshore Infrastructure: ₹10,000 crore: Developing shared offshore production and evacuation facilities in selected basins to facilitate the commercial development of offshore discoveries.

(Operation Guideline) October, 2026: The guidelines provide for shared offshore facilities under an open-access and facility-sharing model to connect and develop stranded and sub-scale discoveries. Proposals undergo technical and commercial appraisal by the Infrastructure Appraisal Board, followed by Public Investment Board appraisal and the prescribed government approval.

4. Oil and Gas Manufacturing and Services Zone: ₹2,000 crore: Establishing an integrated zone to strengthen domestic capabilities in manufacturing, repair, warehousing, engineering and related services.

(Operation Guideline) October, 2026: Implementing entities are responsible for developing, marketing, operating and maintaining the zones, including securing land and statutory approvals. The guidelines also permit convergence with the BHAVYA scheme for eligible base industrial infrastructure, subject to its approval.

An additional ₹350 crore is allocated for programme management, digital interventions, monitoring and evaluation, human resource development, awareness, outreach, events and media. The Directorate General of Hydrocarbons (DGH) serves as the implementing and nodal agency, responsible for tracking the scheme’s progress through a digital monitoring system.

(Operation Guideline) October, 2026: The scheme is governed by the Empowered Steering Committee, Executive Committee and Project Support and Monitoring Unit (PSMU). DGH acts as the Central Nodal Agency, implements the data components, verifies claims and monitors implementation. It is also required to operationalise the SM-OOMS and Single Window Clearance Portal within six months of notification of the guidelines.

Total: 84,084 Crores

(Operation Guideline) October, 2026: Funding for unsuccessful wells is not recoverable. For successful commercial discoveries, recovery begins after seven years of commercial production or when the operator recovers 50% of its exploration and development costs, whichever occurs earlier.

(Operation Guideline) October, 2026:The guidelines separately cover environmental, health, safety and sustainability requirements, monitoring and reporting, convergence with other schemes, public-private collaboration, OIDB-led stakeholder engagement and grievance redressal.

Impact

Samudra Manthan has the potential to strengthen India’s long-term energy security by reducing dependence on imported hydrocarbons and improving the availability of domestic energy resources. Subject to exploration success, the scheme aims to increase India’s annual domestic oil and gas production from approximately 62 MMTOE to 80 MMTOE. The additional production could reduce crude oil imports by nearly ₹1 lakh crore annually, resulting in substantial foreign exchange savings and reducing India’s exposure to global energy price fluctuations and geopolitical disruptions.

Beyond energy security, the scheme could create a wider multiplier effect across the economy, for instance, by stimulating domestic manufacturing and engineering, expanding maritime transport and logistics, and creating employment in skilled technical services. The development of common offshore infrastructure may make previously uneconomical discoveries commercially viable, while the proposed manufacturing and services zone could strengthen domestic industrial capabilities, reduce dependence on imported equipment and encourage technology transfer.

The initiative is also expected to encourage private investment, strengthen international partnerships and generate skilled employment. By promoting collaboration, technology transfer and innovation in offshore exploration and engineering, it could help build indigenous expertise and develop a globally competitive offshore energy ecosystem. In the long run, this would strengthen India’s strategic autonomy and contribute to its broader vision of Atmanirbhar Bharat and Viksit Bharat.

Key Challenges

The implementation of Samudra Manthan involves several challenges:

1. High Exploration Costs: Deepwater and ultra-deepwater exploration require substantial capital investment. A single deepwater exploratory well costs approximately USD 125-150 million, making exploration financially demanding.

2. Technological and Data Limitations: Limited offshore seismic coverage and dependence on specialised drilling technologies make it difficult to identify and explore complex offshore hydrocarbon prospects. Strengthening domestic technological capabilities is essential.

3. Long Gestation Period and Infrastructure Constraints: Moving from exploration to commercial production typically takes 5-10 years. High costs of developing offshore production and evacuation infrastructure can further delay the commercial development of discoveries.

4. Geological and Commercial Uncertainty: Offshore exploration involves considerable geological risks, and drilling does not guarantee commercially viable discoveries. This uncertainty can discourage private investment and sustained exploration.

5. Import Dependence and Declining Production: Limited domestic manufacturing capabilities in specialised offshore equipment and services increase dependence on imports. Additionally, existing oil and gas fields experience natural production declines of approximately 6-7% annually, making continuous exploration necessary to sustain domestic output. (PIB, 2026, Samudra Manthan)

Way Forward

1. Expand Offshore Exploration: Accelerate exploration across India’s expanded Exclusive Economic Zone (EEZ), particularly in underexplored deepwater and ultra-deepwater regions.

2. Strengthen the Revenue-Sharing Framework: Effectively implement the transition from Production Sharing Contracts (PSC) to Revenue Sharing Contracts (RSC) under HELP to promote transparency, reduce administrative complexities and encourage investment.

Under a Production Sharing Contract (PSC), the government and company share profits after deducting recoverable costs. Under a Revenue Sharing Contract (RSC), they share revenue based on a pre-agreed formula without prior cost recovery.

3. Improve Geoscientific Data and Technology: Strengthen Mission Anveshan, the National Seismic Programme, Extended Continental Shelf Survey, National Data Repository and Hydrocarbon Resource Assessment Study. Promote advanced seismic surveys and AI-based data interpretation.

4. Ensure Regulatory Stability: Effectively implement the Oilfields (Regulation and Development) Amendment Act, 2025 and Petroleum and Natural Gas Rules, 2025 to simplify procedures, ensure contractual stability and improve ease of doing business.

5. Strengthen Exploration-Led Operations: Support ONGC and Oil India through sustained investment, advanced technologies and capacity building to translate exploration activities into commercially viable discoveries and domestic production.

Conclusion

Samudra Manthan marks a significant transition from policy-led reforms to mission-mode offshore hydrocarbon exploration in India. By integrating advanced geoscientific data, risk-sharing mechanisms, modern infrastructure and indigenous manufacturing, the scheme seeks to unlock India’s offshore resource potential and strengthen long-term energy security. Its success will depend on effective implementation, technological advancement and environmentally responsible exploration, ensuring that economic development is balanced with ecological sustainability. Ultimately, by strengthening domestic capabilities, reducing import dependence and promoting sustainable resource development, Samudra Manthan can contribute to India’s journey towards energy self-reliance and the vision of Viksit Bharat @2047.

References

1. Press Information Bureau, Government of India. (2025, 17 August). Deep Ocean Mission: India’s Gateway to the Ocean Floor. Ministry of Earth Sciences. https://www.pib.gov.in/PressNoteDetails.aspx?ModuleId=3&NoteId=155043&lang=1&reg=3&utm_source=chatgpt.com

2. Ministry of Petroleum and Natural Gas, Government of India. (2026). Samudra Manthan (National Offshore Exploration Scheme) and Operational Guidelines. Issued on 22 October2026 https://mopng.gov.in/files/Whatsnew/Samudra_Manthan.pdf?utm_source=chatgpt.com

3. Prime Minister of India. (31 July 2026). Cabinet approves ‘Samudra Manthan’ (National Offshore Exploration Scheme) with an outlay of Rs. 84,084 crore. https://www.pmindia.gov.in/en/news_updates/cabinet-approves-samudra-manthan-national-offshore-exploration-scheme-with-an-outlay-of-rs-84084-crore/

4. Press Information Bureau, Government of India. (2026, 3 August). Samudra Manthan – National Offshore Exploration Scheme: Churning the Ocean for Energy. Ministry of Petroleum & Natural Gas. https://www.pib.gov.in/PressNoteDetails.aspx?ModuleId=3&NoteId=159415&lang=2&reg=48&utm_source=chatgpt.com

5. Press Information Bureau, Government of India. (2026, 25 July). Spudding of First Appraisal Well, MN-DWN18-1-HD, Begins in Mahanadi Offshore Basin. Ministry of Petroleum & Natural Gas. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2289301&lang=1&reg=48&utm_source=chatgpt.com

About the Author

Chidaraboyana Shiva Karthik is a UPSC Civil Services aspirant pursuing a Master’s degree in Economics at IGNOU, with an interest in public policy and governance. He holds professional certifications from Harvard, IIM Bangalore, SDG Academy and IBM, and serves as a Research and Editorial Intern at IMPRI.

Acknowledgement 

I would like to express my sincere gratitude to IMPRI (Impact and Policy Research Institute) for giving me the opportunity to work as an intern and write on such an important topic. I would also like to acknowledge the official MeitY and IndiaAI Mission for making authentic data available on the PIB Portal that helped  me to complete this article.

Disclaimer 

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of IMPRI (Impact and Policy Research Institute) or any other affiliated organisation. The information presented in this article is based on publicly available government sources and is intended solely for academic and research purposes.

Reviewed by: Aditya Chavan, Tanisha Hooda

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