Page 56 - Policy Economic Report -August 2026

POLICY AND ECONOMIC
OIL & GAS MARKET

recognising integrated petroleum operations, strengthening dispute resolution mechanisms,
and establishing a contemporary regulatory architecture.

4. Implementation Through New Rules: The Petroleum and Natural Gas Rules, 2025
operationalised these reforms by promoting ease of doing business, improving regulatory
efficiency, and streamlining the administration of petroleum leases.

5. Uniform Decision-Making Framework: The Government has also standardised the
composition and mandate of the Empowered Committee of Secretaries across all contract
regimes, ensuring consistency and a level playing field for all operators, irrespective of when
their contracts were signed.

6. Sharper Focus on Exploration: The performance parameters of ONGC and Oil India have been
reoriented to place greater emphasis on exploration activities, reinforcing the Government's
commitment to expanding India's domestic hydrocarbon resource base.

Hydrocarbon exploration is a capital-intensive and long-gestation activity, with a typical period of 5–
10 years from the award of an exploration block to the commencement of commercial production.
This underscores the need for sustained exploration to meet India's growing energy demand.

Further, existing oil and gas fields witness a natural production decline of around 6–7% every year,
making continuous exploration and new discoveries essential to sustain domestic hydrocarbon
production.

To address these challenges, the Government has reoriented policy towards exploration-led growth.
Under the National Offshore Exploration Scheme “Samudra Manthan” the Government will provide
financial support of up to 50% of the cost of drilling deepwater exploration wells, thereby reducing
exploration risk, encouraging investment, and accelerating the development of India's offshore
hydrocarbon potential.

India's future hydrocarbon potential lies largely in deepwater and ultra-deepwater basins such as
Krishna-Godavari, Cauvery, Mahanadi and the Andaman region. Exploration in these frontier areas
requires advanced technology and significant investment, with a single deepwater exploratory well
costing approximately USD 125–150 million. Recognising the high-risk, high-cost nature of such
exploration, the Government is adopting a risk-sharing approach to encourage sustained investment,
accelerate exploration, and unlock India's offshore hydrocarbon resources.

Samudra Manthan is therefore proposed as a strategic national intervention to de-risk offshore
exploration, catalyse private investment, strengthen domestic production and build enduring national
capability across the offshore exploration and production value chain.

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