The government plans to recover financial support extended to deepwater oil and gas explorers seven years after production begins, or after companies recover half of their development costs, under the Samudra Manthan mission.
The Cabinet recently approved an Rs 84,000 crore scheme to support deepwater exploration through 2030-31. Of this, around Rs 43,000 crore has been earmarked for drilling 60 deepwater and ultra-deepwater wells, with financial assistance covering up to 50 per cent of drilling costs or Rs 675 crore per well, whichever is lower.
Recovery Linked To Commercial Discoveries
If drilling supported under the scheme results in a commercially viable discovery, the government intends to recover its investment only after the explorer has substantially recovered its own funding. The oil ministry has proposed that recovery begin either seven years after a field starts production or after the explorer recovers 50 per cent of the development cost.
The ministry has held consultations with the industry on operationalising the scheme and its proposed investment-recovery mechanism. Some industry participants have suggested that recovery should instead begin five years after production starts.
Industry representatives have also opposed linking repayment to the recovery of half of a project's development cost, amid concerns that determining when the threshold has been reached could become contentious.
Rs 10,000 Crore For Shared Infrastructure
The scheme also provides Rs 10,000 crore for shared production and evacuation facilities in select basins. The infrastructure could help smaller discoveries, which may otherwise struggle with standalone project economics, move towards production.
Another Rs 28,500 crore has been earmarked for offshore data acquisition, including Rs 12,500 crore for 4D seismic data. The Centre is expected to appoint its own agencies to undertake these data-acquisition exercises.
The data collected through the programme will subsequently become part of the National Data Repository (NDR), making it accessible to explorers.
Scheme Targets Risks Across Deepwater Value Chain
The Samudra Manthan initiative seeks to intervene at multiple stages of the upstream value chain, ranging from offshore data acquisition and drilling assistance to the development of common production infrastructure.
The broader objective is to lower the financial and exploration risks that have discouraged companies from pursuing India's deepwater opportunities, attract global oil majors to the country's upstream sector and help reverse years of declining domestic oil and gas production.