India Commits Over $8.8 Billion to Explore Oil and Gas Reserves

The Indian government said it will invest more than $8.82 billion over the next five years to explore and extract deepwater oil and gas reserves in the country’s exclusive economic zone and save tens of billions of dollars in crude oil and natural gas imports in the long run.

The decision is driven by India’s severe overseas dependence for crude oil, with the country importing up to 89% of its crude oil from abroad. The dependence has, in recent years, resulted in various geopolitical frictions, such as the irritation of the Western powers over India’s large-scale imports of Russian crude oil.

India’s freedom to choose where to purchase crude oil from and ensuring a steady supply of crude has also been severely limited by geopolitical crises, such as U.S. sanctions on Venezuelan and Iranian oil and the prolonged closure of the Strait of Hormuz which paralysed cargo movements.

In March, India had to route more than 70% of its crude oil imports outside the Strait of Hormuz to ensure steady energy supplies of crude oil and LPG. Even though the supply situation was stabilised, the rerouting resulted in increasing transportation costs and ballooning insurance premiums.

With the U.S.-Iran conflict in a highly unstable terrain, India’s crude oil imports may face further disruptions this year, exasperated by the high volume of imports by the world’s third largest energy consumer. On 27 July, Minister of State for Petroleum and Natural Gas Suresh Gopi said in the Rajya Sabha that India’s energy import dependence had risen from 85.5% in 2021-22 to an astronomical 88.7% in 2025-26. Domestic production of crude oil remains stagnant at just below 30 million metric tonnes a year.

India spent approximately $134.7 billion to import crude oil in 2025-26, hence the recently-announced outlay of $8.82 billion, spread over five years, to explore and extract deepwater oil reserves forms a minuscule proportion of the country’s annual energy bill.

Out of the total outlay of ₹84,084 crore, more than half, or ₹43,200 crore, will be spent to accelerate offshore exploration and to drill as many as 60 deepwater exploration wells. The government will also provide 50% of drilling cost for eligible drilling projects limited to ₹675 crore per well.

Aside from the allocation of ₹43,200 crore, the government will spend an additional ₹10,000 crore on infrastructure-led deepwater production and exploration, ₹2,000 crore on the development of oil and gas manufacturing and services zones, ₹24,534 crore on 2D and 3D seismic data acquisition for basin-wide coverage, and another ₹4,000 crore on NDR data re-processing and AI tools implementation.

The offshore deepwater exploration operation, nicknamed “Samudra Manthan” by the government, will be aimed at deepwater and ultra-deepwater basins such as Krishna-Godavari, Cauvery, Mahanadi and the Andaman region. The government believes these basins have promising hydrocarbon potential, and heavy investments made today could bear fruit in a decade from now.

“Hydrocarbon exploration is a capital-intensive and long-gestation activity, with a typical period of 5–10 years from the award of an exploration block to the commencement of commercial production. This underscores the need for sustained exploration to meet India's growing energy demand,” it said. “Further, existing oil and gas fields witness a natural production decline of around 6–7% every year, making continuous exploration and new discoveries essential to sustain domestic hydrocarbon production.”

To fully explore the entirety of its exclusive economic zone adjoining its vast coastline, the government of India also freed up 99% of the area previously marked as “no-go zones” and used by agencies such as the Defence Research and Development Organisation, the Indian Navy, and the Department of Space. This initiative freed up about 1 million square kilometres out of India’s total EEZ of 2.36 million square kilometres.

It is believed that India’s offshore basins contain approximately 17 billion tonne oil equivalent of oil and gas resources, but only 2.6 BTOI have been produced so far, leaving vast areas virtually untapped and unexplored.

No sooner was Mission Samudra Manthan announced that state-owned Oil and Natural Gas Corporation said it “spudded” or began work at its deepwater exploratory well in the Mahanadi Offshore Basin in Odisha, calling it the “beginning of an ambitious programme to explore India’s deep and ultra-deepwater energy resources.”

“The commencement of drilling marks the beginning of one of India’s most challenging deepwater exploration campaigns. Every prospect evaluated, well drilled and discovery made will contribute towards enhancing domestic production, reducing import dependence and strengthening India’s energy security and self-reliance,” the company added.