Why India’s offshore exploration push reflects a global shift toward energy security
Subscribe to our free newsletter today to keep up to date with the latest energy, oil and gas news.
India’s decision to launch the Samudra Manthan offshore exploration scheme marks one of its most significant upstream investments in years. While the announcement is focused on boosting domestic oil and gas production, it also reflects a broader shift in how governments are approaching energy security. After years of geopolitical disruption, volatile commodity markets and supply chain uncertainty, many energy-importing nations are placing renewed value on domestic resources, even as they continue investing in the energy transition.
Samudra Manthan, formally known as the National Offshore Exploration Scheme, was approved by India’s Union Cabinet with funding of ₹84,084 crore (approximately US$9.6 billion). The program is designed to accelerate exploration across India’s offshore basins, particularly deepwater and ultra-deepwater areas where high costs have historically discouraged investment. It includes large-scale seismic surveys, exploratory drilling, shared offshore infrastructure and incentives intended to attract domestic and international operators. According to the government, the initiative could ultimately add more than 600 million metric tons of oil equivalent to India’s resource base.
The financial challenge is considerable. A single deepwater exploration well can cost between ₹1,000 crore and ₹1,200 crore, with no guarantee of success. To encourage investment, the government plans to reimburse up to 50% of qualifying exploration costs, reducing the financial risk for operators willing to pursue frontier acreage.
The rationale is straightforward. India imports roughly 85% to 90% of the crude oil it consumes, leaving the world’s third-largest oil importer highly exposed to global price volatility and geopolitical events. Strengthening domestic production will not eliminate that dependence, but it can reduce vulnerability to external shocks while improving long-term supply resilience.
Although the initiative is specific to India, the thinking behind it is becoming increasingly common across global energy markets.
Reducing import dependence has become a strategic priority
The past five years have fundamentally reshaped the energy security debate. Russia’s invasion of Ukraine disrupted European gas supplies, conflict across the Middle East has renewed concerns over oil markets and shipping disruptions through the Red Sea have exposed the fragility of global supply chains.
As a result, governments are placing greater emphasis on resilience alongside affordability.
For major importing economies, complete energy independence is neither realistic nor necessarily desirable. Global energy markets will remain essential. Even so, increasing domestic production can reduce exposure to international disruption and provide greater flexibility when markets tighten.
This represents a notable change in how upstream investment is evaluated. Domestic production is no longer judged solely on its commercial returns. Its contribution to national resilience has become an increasingly important part of the equation.
Domestic production still matters during the energy transition
India’s offshore strategy also highlights a growing recognition that expanding renewable energy does not remove the need for domestic hydrocarbons.
Oil and gas continue to underpin transport, petrochemicals, aviation, shipping and many industrial processes, while natural gas remains an important source of flexibility for electricity systems with increasing renewable generation. Most long-term energy outlooks project continued demand for hydrocarbons for decades, even as low-carbon technologies expand.
That leaves governments with a practical choice. If oil and gas demand is expected to persist, should a greater share be produced domestically where resources exist, or sourced through imports?
India’s latest policy suggests domestic production remains an important part of the answer. Alongside improving supply security, it supports skilled employment, domestic supply chains and investment in technical capability. Rather than competing with decarbonization, these objectives are increasingly viewed as complementary.
Deepwater exploration is returning after years of caution
India’s offshore push also reflects a wider revival in deepwater exploration.
Following the oil price downturn in the mid-2010s, many operators shifted capital away from frontier offshore projects in favor of lower-risk developments. High costs and investor demands for capital discipline made deepwater exploration less attractive.
That picture is beginning to change.
Advances in seismic imaging, drilling technology and subsea production systems have improved exploration efficiency, while governments are introducing targeted incentives to unlock frontier basins. Stable oil prices and growing concerns over long-term supply have also renewed interest in large offshore discoveries capable of sustaining production for decades.
India is far from alone. Brazil continues to expand output from its pre-salt fields, Guyana has become one of the world’s fastest-growing oil producers following a string of offshore discoveries and Namibia has emerged as one of the industry’s most closely watched exploration frontiers. Across these markets, deepwater investment is being driven not only by resource potential but also by the strategic value of strengthening domestic supply.
Lessons for other importing nations
India’s offshore strategy offers several lessons for countries seeking to strengthen long-term energy resilience.
First, reducing import dependence should be viewed as a strategic objective rather than purely an economic calculation. Even modest increases in domestic production can improve resilience during periods of market disruption.
Second, governments have an important role in reducing exploration risk where geological potential exists but commercial barriers remain high. Carefully designed incentives can unlock private investment without replacing market discipline.
Third, energy security and the energy transition are increasingly complementary rather than competing priorities. Expanding renewable generation while maintaining domestic oil and gas production offers governments greater flexibility as energy systems evolve.
Finally, policy certainty remains essential. Offshore projects require billions of dollars in capital and development timelines measured in decades. Stable fiscal terms and predictable licensing frameworks remain critical to attracting long-term investment.
India’s Samudra Manthan scheme is unlikely to be the last major offshore exploration initiative announced by an energy-importing nation. It reflects a broader shift in policy, where domestic production is valued not simply for the hydrocarbons it delivers, but for the resilience it provides in an increasingly uncertain world.
Source
