India begins drilling in Mahanadi Offshore Basin for oil and gas in deep-water push

India has started drilling the first appraisal well in the Mahanadi Offshore Basin -- a move that will expand the country's upstream push in the deep-water segment and potentially unlock new oil and gas reserves, according to a petroleum ministry statement July 25.

The MN-DWN18-1-HD appraisal well is the first of four planned deep-water wells that will systematically evaluate one of India's most prospective offshore basins, the statement said.

"This is the beginning of a new chapter in India's journey toward energy security. The drilling program will employ world-class deep-water drilling technology to unlock new hydrocarbon resources and strengthen India's domestic production capability," the statement quoted Petroleum Minister Hardeep Singh Puri as saying.

The well, operated by state-run Oil and Natural Gas Corp., is located off the Odisha coast and builds on ONGC's recent Utkal and Konark discoveries, the company said in a post on X. "The next frontier is deep waters. India is ready to explore it."

Puri said that over the past decade, the government had fundamentally transformed the exploration and production ecosystem through landmark policy and regulatory reforms.

He added that the introduction of the Hydrocarbon Exploration and Licensing Policy, the replacement of the nomination-based approach with the Open Acreage Licensing Program, the adoption of a transparent revenue-sharing framework and the opening of nearly 99% of the former offshore "No-Go" areas for exploration were yielding strong results.

Puri said that nearly 81% of India's active exploration acreage had been awarded after 2014, reflecting the confidence these reforms had inspired among investors and explorers alike.

Emphasizing the importance of scientific exploration, he added that the government has made sustained investments in geoscientific data generation through initiatives such as the National Seismic Program, the Extended Continental Shelf Survey, the National Data Repository and the Hydrocarbon Resource Assessment Study, creating one of the world's most comprehensive geoscientific databases to unlock India's frontier basins.

Accelerating domestic efforts

Highlighting the progress achieved under the government's exploration reforms, Puri said that under OALP, 172 exploration blocks covering nearly 380,000 square kilometers had been awarded, with committed investments exceeding $4.3 billion. In fiscal year 2025-26 (April-March) alone, about 674 wells were drilled, five new discoveries were made and seven discoveries were monetized.

Puri said the government was pursuing a two-fold strategy -- discovering new hydrocarbon resources while maximizing recovery from existing national assets. He added that efforts are also underway to revitalize mature producing fields by deploying advanced technologies.

Puri said India's energy future would not be secured by a single discovery, but through sustained policy reforms and the implementation of new technology.

"As we commence this first well today, we are not merely drilling into the seabed -- we are drilling into India's future energy security. Every meter drilled brings us closer to reducing import dependence and strengthening self-reliance," Puri said.

According to S&P Global Energy CERA, discovery volumes had declined over the past decade due to a focus on low-risk, near-field exploration and aging field decline, underscoring the need for renewed, high-impact exploration campaigns.

India's upstream sector sits at the heart of its energy security challenge, with the country importing nearly 90% of its crude oil and more than half of its natural gas requirements. This dependence has sharpened the urgency to boost domestic production, especially as geopolitical disruptions expose the vulnerability of import-heavy energy systems, CERA said.

The government has responded in recent years by pushing for aggressive acreage expansion to 1 million sq km by 2030, while emphasizing exploration in frontier and deep-water basins such as the Mahanadi, Andaman, Bengal and Kerala-Konkan regions, which are estimated to hold substantial untapped resources, it added.