Govt To Share Deepwater Oil, Gas Exploration Costs Under Rs 84,084-Crore Samudra Manthan Scheme

New Delhi, Oct 24 (KNN) The government will share deepwater oil and gas exploration costs with energy companies under the Rs 84,084-crore Samudra Manthan scheme, supporting exploratory drilling, offshore seismic surveys and shared production infrastructure.

The Ministry of Petroleum and Natural Gas has issued operational guidelines for the programme, which aims to boost exploration in India’s deepwater and ultra-deepwater basins, where high costs and geological uncertainties have deterred investment.

Running through FY31, the scheme seeks to reduce dependence on imported hydrocarbons. FY27 will serve as a preparatory year, with Phase I expenditure planned for FY28-FY31, reported PTI.

Petroleum Secretary Neeraj Mittal called it “the most ambitious upstream oil and gas intervention undertaken in recent times” and said it could help add over 600 million tonnes of oil equivalent to India’s reserves.

Govt To Fund Up To 50% Of Exploratory Well Costs

Under the scheme’s central component, the government will fund 56 exploratory wells and four stratigraphic wells in deepwater and ultra-deepwater areas, defined as waters exceeding 400 metres and 1,500 metres, respectively.

For exploratory wells, support will cover up to 50 per cent of actual costs, capped at Rs 675 crore per well. Stratigraphic wells, used to study underground rock formations and geological structures, will receive up to 100 per cent funding, capped at Rs 1,350 crore per well. Only state-owned companies or their lead consortia are eligible.

At the maximum limits, support for all 60 wells could reach Rs 43,200 crore, accounting for more than half the scheme’s total outlay. However, the guidelines do not specify budget allocations for individual components.

Funding Linked To Drilling Milestones

Government support will be disbursed in two stages: 40 per cent when drilling reaches 40 per cent of the sanctioned depth and the remaining 60 per cent after well completion and approval of the well report.

The scheme covers only blocks awarded under the Revenue Sharing Contract regime. Production Sharing Contract and coal-bed methane blocks are excluded unless otherwise specified by the government. Development wells are ineligible, and support will not increase automatically if costs exceed approved limits.

The government will begin recovering its support after seven years of commercial production or when the operator has recovered 50 per cent of exploration and development costs, whichever comes first. Recoveries will not be adjusted for inflation.

The framework seeks to reduce upfront exploration costs while allowing the government to recover its investment from successful projects. Companies must bear costs beyond approved limits and may lose eligibility if they fail to meet work commitments or pay penalties instead of completing committed drilling.

Support For Shared Offshore Infrastructure

The second component will provide viability gap funding for shared infrastructure linking multiple small or stranded discoveries to common production systems. Eligible facilities include subsea manifolds, trunk pipelines, central processing platforms and shared floating production units.

Initial support is planned for the Mahanadi basin, with token funding allocated for Kutch. Proposals will be reviewed by the Public Investment Board before ministerial approval of expenditure.

The initiative aims to make discoveries commercially viable by reducing the infrastructure costs of developing them independently.

Common Facilities For Oil And Gas Industry

The third component envisages oil and gas manufacturing and services zones with shared utilities, testing and certification facilities.

These zones may be developed alongside BHAVYA, an industrial infrastructure scheme run by the Commerce Ministry’s trade promotion department. However, any funding shortfall under BHAVYA will not create additional financial liability for Samudra Manthan.

Governance And Monitoring Framework

An empowered steering committee chaired by the Cabinet Secretary will oversee the programme, while an executive committee led by the Petroleum Secretary will handle final appraisal. A programme unit headed by a joint secretary will monitor day-to-day progress.

The Directorate General of Hydrocarbons (DGH) will act as the nodal and implementing agency, tracking progress through a digital monitoring system.

(KNN Bureau)