☀️ Schemes
Samudra Manthan: Government to share half the cost of risky deep-sea wells
In 60 seconds: The government will pay up to half the cost of risky deepwater exploration wells under its ₹84,084-crore Samudra Manthan scheme. If a well finds oil or gas, the company repays the money from its revenue. If it finds nothing, the government bears the loss. New guidelines set out this recovery clause: repayment starts after seven years of production or once half the costs are recovered.
Why it matters
India imports most of its oil and gas. Sharing the risk of costly deep-sea drilling could bring more companies to search for fuel at home.
Explain it simply
Digging a deep well in the sea is like buying a very expensive lottery ticket. The government is saying: we'll pay half the ticket. If you win, pay us back from your winnings. If you lose, we share the loss.
The 3-minute read
What happened
Operational guidelines for the ₹84,084-crore Samudra Manthan scheme say the government will fund up to 50% of the cost of risky deep-water exploration wells. The money is repaid only if the well finds oil or gas.
Background
Deep-water wells cost far more than wells on land or in shallow seas, and many find nothing. That risk has kept companies away from India's deep offshore areas, even though the country depends heavily on imported crude oil.
How it works
The scheme's key bargain is the recovery clause. The government takes on early geological risk and keeps a claim on any upside. Repayment begins after seven years of commercial production, or once the operator has recouped 50% of its exploration and development costs, whichever comes first. It is paid in annual instalments, without adjusting for inflation.
What's next
Watch whether oil companies, public and private, now bid for deep-water blocks and drill more wells, and whether any big discovery follows.
What it means for you
More oil and gas found at home would reduce India's import bill and, over time, make fuel prices less exposed to global shocks.
Key numbers
- ₹84,084 cr: Size of the Samudra Manthan scheme
- 50%: Max share of well cost the government pays
- 7 years: Of production before repayment starts
Key terms explained
- Deepwater exploration
- Searching for oil and gas under very deep sea, which is costly and risky.
- Recovery clause
- The rule that decides when and how the government gets its money back if a well succeeds.
The story so far
- 1974: Oil found at Bombay High, off Mumbai. In 1974, oil was discovered at Bombay High in the Arabian Sea, about 160 km off Mumbai. It became India's largest oil-producing field.
- Aug 2025: PM announces a national deep-water exploration mission. In his Independence Day speech in August 2025, the Prime Minister announced a national mission to explore India's deep waters for oil and gas, to cut dependence on imports.
- Today: Cost-sharing rules for deep-sea wells released
Exam notes (UPSC, SSC, Banking, PSC)
- Samudra Manthan is a ₹84,084-crore scheme to support deep-water oil and gas exploration.
- The government funds up to 50% of a risky deep-water well; repaid only if oil or gas is found.
- Repayment starts after 7 years of commercial production or after 50% of costs are recouped, whichever is earlier.
- Bombay High, discovered in 1974, is India's largest offshore oil field.
Likely exam question: What is the Samudra Manthan scheme, and how does its cost-sharing work?