India Spends Big on Deep-Sea Oil Exploration Amid Rising Import Costs

The Indian government has approved an ambitious plan to explore deep-sea oil and gas reserves in its waters. The 'Samudra Manthan' five-year plan, worth approximately $10.1 billion, aims to reduce India's reliance on crude oil imports by increasing domestic production.

Under the plan, the government will bear 50% of exploration costs for all offshore basins nationwide, including Krishna-Godavari and Cauvery, even if no oil or gas is found. The goal is to drill 60 deep-water wells with operating depths exceeding 500 meters and some reaching as far as 1,500 meters.

The plan also involves conducting modern seismic data surveys for all offshore basins and building a unified offshore oil and gas support system, including pipelines, production platforms, and a geological data cloud platform.

Industry analysts point out that India's decision to launch this large-scale exploration plan is driven by both internal and external pressures. With ongoing conflicts in the Red Sea and the Strait of Hormuz forcing Indian refiners to bypass the Cape of Good Hope, shipping freight and insurance costs have significantly eroded refining profits.

India aims to increase annual domestic oil and gas equivalent production from 62 million tons to 80 million tons, reversing a decline that saw domestic crude oil production drop by 22% between fiscal years 2015-16 and 2024-25. This target is part of India's broader effort to reduce its high crude oil import dependency of 88.7%.