India may be on the verge of one of its most significant breakthroughs in energy exploration, with the Andaman Sea emerging as a potential hotspot for massive crude oil reserves. Recent statements by Union Petroleum and Natural Gas Minister Hardeep Singh Puri have ignited national interest and international curiosity. He has hinted that the region could hold oil reserves comparable to those recently discovered in Guyana—a country that shot to global energy prominence after striking 11.6 billion barrels of oil.
If India's exploration efforts prove successful, it could dramatically transform the nation’s energy landscape, reduce its heavy dependence on imports, and potentially catapult the country into a new era of economic strength and energy security.
India’s Current Energy Dependence
India is the world’s third-largest importer of crude oil, after the United States and China. The country imports more than 85% of its crude oil and 50% of its natural gas, making it highly vulnerable to fluctuations in global energy markets and geopolitical instability. This heavy dependence also places enormous pressure on the country's foreign exchange reserves and trade balance.
With energy demand projected to grow substantially in the coming decades, the need for self-reliance has never been more urgent. The possibility of large oil reserves in the Andaman Sea comes as a timely and strategic development.
Unexplored Potential in India’s Sedimentary Basins
According to Minister Hardeep Singh Puri, India has over 3.5 million square kilometers of sedimentary basins, but only about 8% of that area has been explored so far. Historically, large parts of this potential resource base were classified as "no-go" zones due to policy or logistical constraints.
However, recent reforms have changed that. The government has now made 1 million square kilometers of previously restricted area available for exploration and production (E&P). This is a monumental shift and has already attracted significant attention from public and private sector players.
Why the Andaman Sea?
The Andaman and Nicobar region is gaining attention due to geological studies and early survey results indicating promising hydrocarbon potential. In fact, Minister Puri stated that India has the potential of "several Guyanas" in this region. This comparison isn’t made lightly. Guyana discovered massive reserves only after drilling dozens of wells, finally striking oil in the 41st attempt. That find transformed Guyana into a key global player in the oil market.
The same trajectory is being eyed for India’s Andaman Sea. While the process is complex and expensive, early signs from exploratory wells have given experts reasons to be optimistic. The Indian government and major PSUs like ONGC and Oil India have already started investing heavily in exploration here.
The Economic Impact of a Big Find
A discovery on the scale of Guyana’s 11.6 billion barrels could have far-reaching implications for India:
i) Reduced Import Bills: With domestic production ramping up, the cost of oil imports could come down significantly.
ii) Energy Security: Reduced reliance on unstable foreign sources would strengthen India’s strategic autonomy.
iii) Employment Generation: Oil and gas exploration and production are labor-intensive and would create thousands of direct and indirect jobs.
iv) Boost to GDP: Minister Puri suggested that such a discovery could help push India’s economy from $3.7 trillion to $20 trillion over time.
v) Lower Fuel Prices: Increased domestic supply could help moderate domestic fuel prices.
Government Policy and Industry Response
The government's Open Acreage Licensing Policy (OALP) has been instrumental in driving this exploration surge. Under OALP, companies can bid for exploration blocks throughout the year, based on their own assessment. According to Puri, 38% of bids in the nine rounds so far have covered around 1 million square kilometers, and future rounds are expected to see over 75% coverage.
Additionally, the government has issued some of the largest exploration bids in the world, offering around 2.5 lakh square kilometers for exploration.
Major investments have already been made. In FY24, ONGC drilled 541 wells — the highest number in 37 years — and invested over ₹37,000 crore in capital expenditure. That includes both exploratory and development wells across various regions.
Challenges Ahead
While the potential rewards are massive, the road to discovery is not without obstacles:
i) High Costs: Offshore drilling is expensive. A single offshore well can cost $100 million, compared to just $4 million for an onshore well.
ii) Technological Demands: Advanced technology and skilled personnel are needed for deep-sea drilling.
iii) Environmental Concerns: Drilling in ecologically sensitive areas like the Andaman Sea will require strict regulatory oversight.
Yet, the government seems committed to overcoming these challenges, motivated by the long-term benefits of energy independence.
What Has Been Found So Far?
While the large-scale discovery is still awaited, early exploration has led to smaller, promising finds. For example:
i) Suryamani Well: Estimated to hold 4 million metric tons of oil.
ii) Neelmani Well: Estimated at 1.2 million metric tons.
iii) Deep-Water Well at 2,865 meters: Found reserves of both oil and natural gas, and is believed to be an underestimation.
These discoveries, though modest in comparison to the Guyana benchmark, are encouraging indicators of untapped potential.
Strategic Reserves and Future Planning
India already maintains strategic petroleum reserves in Visakhapatnam, Mangalore, and Padur, with future sites planned in Odisha and Rajasthan. These reserves are critical for energy security and will be even more valuable if domestic production increases significantly.
Moreover, diversification of the energy import basket and cleaner energy initiatives are being pursued in parallel, indicating a multi-pronged approach to energy resilience.
Final Thoughts: A Tipping Point for India?
The prospect of discovering massive crude oil reserves in the Andaman Sea has created a wave of optimism across government and industry circles. While it's still too early to celebrate, the groundwork is being laid through policy reforms, increased exploration, and strategic investment.
Minister Hardeep Puri's statements suggest confidence backed by data and experience. If the comparisons to Guyana turn out to be accurate, this could indeed be India’s "Guyana moment"—a defining event that changes the course of its energy future.
Whether it's a matter of years or just a few more wells, the stakes are high. But one thing is certain: the Andaman Sea has become the most-watched frontier in India’s journey toward energy self-reliance and economic transformation.