Cabinet approves ₹84,084-crore ‘Samudra Manthan’ scheme for offshore energy exploration

The Union cabinet chaired by Prime Minister Narendra Modi on Friday approved Samudra Manthan, a ₹84,084 crore national offshore exploration scheme that aims to boost depleting domestic oil and gas resources at a time when India’s crude oil import dependency has surged from 78.5% in 2014-15 to 88.7% in 2025-26.The scheme draws on the Prime Minister’s vision, articulated from the Red Fort on Independence Day last year, of a modern-day “Samudra Manthan” — a reference to the churning of the ocean in India’s ancient epics — to unlock India’s vast offshore energy potential, an official statement issued by the cabinet said. “It marks a landmark step towards strengthening India’s energy security, accelerating domestic exploration and production, promoting technological leadership, and advancing the vision of Viksit Bharat,” the statement said. Also Read | At CCS meet, PM Modi orders ‘whole of govt’ plan to protect oil supplies, Indians in West AsiaAccording to a spokesperson for the petroleum ministry, the scheme, which has an approved budget of ₹84,084 crore in its first phase up to March 31, 2031, has four key components: acquisition and processing of modern offshore seismic data with an outlay of ₹28,534 crore; drilling of 60 deepwater exploration wells (total outlay ₹43,200 crore, including government support of up to 50% of eligible drilling cost or ₹675 crore per well); development of common offshore infrastructure hubs ( ₹10,000 crore) to facilitate commercialisation of discoveries; and establishment of oil and gas manufacturing and services zones ( ₹2,000 crore) to promote domestic manufacturing and localisation of critical equipment and services.Subject to exploration success, the scheme aims to increase India’s domestic oil and gas production from around 62 MMTOE (million metric tonnes of oil equivalent) to 80 MMTOE annually and expand the country’s hydrocarbon resource base from 1.6 billion TOE to 2.2 billion TOE. “The additional production has the potential to reduce crude oil imports by nearly ₹1 lakh crore annually, strengthening India’s energy security and reducing import dependence,” the spokesperson added.India’s domestic oil and gas productionThe policy comes at a time when India’s domestic oil and gas production from mature and ageing fields is declining. Some of the country’s major producing fields, such as the offshore Mumbai High and fields in Assam, have been in production for several decades and are well past what is known as the plateau production phase. India is the world’s third-largest oil consumer after the US and China, but its domestic energy output is low; it ranks around 20th in the world in terms of production. The country imported 189.4 million metric tonnes (MMT) of crude in fiscal 2015, which grew to 245.3 MMT in fiscal 2026. According to a statement made by minister of state for petroleum Suresh Gopi in the Lok Sabha on March 10, India’s domestic crude oil production is declining. Output from domestic fields fell from 36.9 MMT in 2015-16 to 28.7 MMT in 2024-25 despite the government auctioning 172 exploration blocks (3,78,652 sq km) in nine bidding rounds of the Open Acreage Licensing Policy (OALP).Also Read | Analysis-Drone strike in Egypt sparks security concerns about Suez oil exportsIndia also imports natural gas in large quantities to meet domestic requirements. Together with crude oil, India’s oil and gas import dependence was 80.7% in 2025-26. India’s total natural gas consumption in 2025-26 was 68,753 million metric standard cubic metres (MMSCM); gross domestic natural gas output that fiscal year was 34,776 MMSCM.What government and industry experts saidGovernment and industry experts said the cabinet decision is a much-needed intervention as augmenting domestic energy output is a key requirement for a rapidly growing economy. The Prime Minister articulated this too in his speech on August 15, 2025, they said. “Samudra Manthan” is expected to catalyse reserve accretion of more than 600 MMT of oil equivalent (MMToE), substantially increase offshore exploration activity, promote higher domestic oil and gas production, generate large-scale employment, strengthen indigenous manufacturing under Make in India and Atmanirbhar Bharat, and foster a globally competitive ecosystem for offshore technologies and services. The scheme is also expected to stimulate significant investments across the exploration and production value chain, creating long-term opportunities for industry, innovation and economic growth.In his speech last year, Modi said India spent a “huge part of the budget” on energy imports. “If we were not dependent on energy, that money would have been used for the future of the youth of my country, that money would have been used to help the poor of my country fight against poverty, that money would have been used for the welfare of the farmers of my country, that money would have been used to change the conditions of the villages of my country, but we had to give it to foreign countries.”“Now we are working towards becoming self-reliant. To make the country developed, we are now moving towards ‘Samudra Manthan’ (churning of the ocean). Taking forward our Samudra Manthan, we want to work in a mission mode towards finding oil reserves, gas reserves under the sea and hence India is going to start the National Deep Water Exploration Mission. This is our important announcement to become energy independent,” he added.Also Read | US grants Serbian oil firm another sanctions waiverThe scheme approved on Friday encompasses a comprehensive set of interventions across the offshore exploration value chain. It provides for large-scale acquisition, processing and interpretation of high-quality seismic data, accelerated deepwater and ultra-deepwater exploratory drilling, scientific drilling in frontier basins, development of common offshore production and evacuation infrastructure, and establishment of an integrated oil and gas manufacturing and services zone, a government statement issued after the cabinet meeting said. “It also includes dedicated provisions for digital programme management, capacity building, technology adoption, stakeholder engagement and international outreach, creating an integrated ecosystem to accelerate offshore exploration and production in the country,” it added.Rajnish Gupta, partner, Tax and Economic Policy Group at EY India said: “The Samudra Manthan scheme is a significant announcement of the seriousness of the Government in making India’s E&P sector stronger.” “Investments in large-scale seismic data acquisition and drilling of exploratory wells in deep and ultra deep waters will reduce geological uncertainty and derisk exploration and lay the foundation for future discoveries. Good results can catalyse greater private investments in the sector,” he added.The emphasis on shared infrastructure for production and evacuation is also important, as it can improve project viability and create value by lowering costs for discoveries that may otherwise be considered marginal. This will support India’s efforts to reduce import dependence while building a more resilient energy ecosystem, Gupta said.