INTERVIEW: India seeks to attract upstream capital with offshore reforms, deepwater drilling support

India has opened a large swath of previously inaccessible offshore basins as it seeks to attract investment in exploration and production, combining new acreage with economic incentives and support through the Samudra Manthan program, Neeraj Mittal, secretary at the Ministry of Petroleum and Natural Gas, said Oct. 13.

The reforms are designed to address investment risks across the full exploration and production cycle, from evaluating geological prospects to developing discoveries and bringing them on stream. However, the government recognizes that offshore exploration remains uncertain and capital-intensive, requiring patient, long-term capital, technical expertise and disciplined execution, Mittal told Platts, part of S&P Global Energy, during an oil markets podcast.

"My message to companies, global companies, is to examine the opportunities closely and engage with us. There is considerable scope to build partnerships, if required, with national oil companies, which we think would be commercially rewarding and would contribute to India's domestic energy supply as well. The opportunity ahead will turn a new accessible frontier into a sustained program of exploration and development," Mittal said.

Investors will have access to stable contracts, deepwater fiscal incentives, publicly funded seismic surveys, shared infrastructure and conditional government support for frontier drilling, he added.

"If you take all these changes along with the hydrocarbon exploration and licensing policy and the open acreage licensing framework, the companies really get a very wonderful scope to select their opportunities for their investments. Of course, the geological uncertainty will remain part of the exploration, but the government's role is to make the policy environment clear and dependable, which we have done," Mittal said.

Additionally, the Oilfields (Regulation and Development) Amendment Act 2025 and related rules provide for including unified leases, stability in lease conditions and clearer dispute-resolution arrangements, he added.

Category II, III basins

India has also revised fiscal and contractual provisions to address the high costs and uncertainty associated with Category II and Category III basins, particularly in deepwater and ultra-deepwater areas, Mittal said.

"Deepwater economics is really highly sensitive to the timing of expenditure, the probability of discovery and the scale of resource which is ultimately discovered and developed," he said.

The federal Cabinet approved investments of up to 840 billion Indian rupees ($8.8 billion) over five years in late July to advance offshore oil and gas exploration under Samudra Manthan, or the National Offshore Exploration Scheme. The initiative is expected to catalyze reserve accretion of more than 600 million metric tons of oil equivalent by fiscal year 2030-31 (April-March), the petroleum ministry said July 31.

The government will fund up to 50% of eligible deepwater exploration drilling costs, capped at $71 million per well. By partially covering these costs, the scheme could significantly improve the economics of frontier exploration.

Mittal said Samudra Manthan was conceived as a long-term energy security initiative rather than as a response to a specific supply disruption. The program was announced before the latest crisis, he added, reflecting the government's view that India must develop domestic resources despite the long lead times involved.

"The design of the program recognizes that difficult investment decisions may arise before a company knows whether a commercially recoverable resource exists," Mittal said, adding that it is intended to complement the fiscal regime by addressing costs incurred before commercial success is established.

India is also seeking to reduce the administrative and operational delays that can affect offshore development schedules, he said.

"The government realizes that ease of doing business is critical for improving the [exploration and production] outcomes," Mittal said, adding that delays can affect factors such as rig availability and appraisal sequencing. Updated contracts therefore provide for flexible work programs, exit provisions and clear treatment of delays related to statutory clearances.

Latest exploration rounds

India's Open Acreage Licensing Policy Rounds X and X1 offer international explorers access to substantial offshore acreage, Mittal said.

Round X comprises 25 blocks covering about 182,589 square kilometers across 13 sedimentary basins. 19 blocks are offshore, including one deepwater block and 12 ultra-deepwater blocks. Round X1 comprises 21 blocks covering about 80,234 sq km, including one deepwater block and four ultra-deepwater blocks.

"The onshore and shallow-water bidding windows have closed, while the deepwater and ultra-deepwater windows for both rounds are scheduled to remain open until Nov. 15," Mittal said, adding that international companies should evaluate the blocks alongside the applicable terms, contractual safeguards and available geological data.

The National Data Repository provides access to available seismic and well information, while the Directorate General of Hydrocarbons makes block coordinates, maps and other geoscientific material available to bidders.

"A good amount of data, seismic data, would help companies assess any petroleum system. Before they commit scarce exploration capital, they would need that," Mittal said.

He added that India's confidence in the next phase of upstream development comes from the cumulative impact of regulatory reform, contractual stability, investment protections, unified leases, broader acreage access and improved project economics.

"The opportunity ahead will turn a new accessible frontier into a sustained program of exploration and development," Mittal said.

According to S&P Global Energy CERA, recent geopolitical turbulence has further underscored supply vulnerabilities. Against this backdrop, the government is accelerating efforts to boost domestic exploration, as reflected in the latest rounds of exploration.

Global momentum behind offshore deepwater and ultra-deepwater discoveries has also encouraged India to expand exploration into its own frontier and unexplored regions. Several of the country's Category II and Category III basins — such as Mahanadi, Andaman Sea, Bengal and Kerala-Konkan — remain largely underexplored despite having, according to government estimates, about 22 billion barrels of oil equivalent in undiscovered hydrocarbon potential, said Rahul Chauhan, senior principal upstream analyst at CERA.

To tap these resources, India is actively seeking participation from global operators with advanced deepwater expertise. The $8.8 billion in funding under Samudra Manthan will help accelerate deepwater and ultra-deepwater exploration in the country, with the aim of strengthening domestic production, enhancing energy security and reducing long-term import dependence, Chauhan added.