The Indian government will finance up to half the cost of risky deepwater exploration wells under its ₹84,084 crore Samudra Manthan scheme, while expecting reimbursement from revenues if oil or gas is discovered. Should a well turn up empty, the State will absorb the loss entirely. This recovery mechanism forms the core of the newly released operational guidelines, allowing the government to carry initial geological risks while retaining a claim on future commercial upsides.

Under the guidelines, financial recovery begins after seven years of commercial production or once operators recoup 50% of their exploration and development costs, whichever occurs first. Repayments will be collected in annual installments without inflation indexation. The initiative is designed to support 60 wells across deepwater locations deeper than 400 meters and ultra-deepwater areas exceeding 1,500 meters. Of these, 56 exploratory wells are eligible for up to 50 percent of actual costs, capped at ₹675 crore each, while four stratigraphic wells dedicated to studying rock layers qualify for up to 100 percent funding, capped at ₹1,350 crore each. Only state-run companies or consortia led by them are permitted to apply.

Disbursements are tied to specific operational milestones, issuing 40 percent when drilling reaches 40 percent of approved depth and the remaining 60 percent upon completion and approval of the final well report. Based on these caps, well support alone could total approximately ₹43,200 crore. Strict eligibility criteria dictate that only blocks awarded under the Revenue Sharing Contract regime qualify, excluding older production-sharing and coal-bed methane blocks unless officially notified otherwise. Only exploratory wells aimed at discovering new resources are covered, leaving development wells and sidetrack well costs ineligible.

Running through the 2030-31 financial year, the scheme follows a preparatory period in 2026-27 and active spending phases from 2027-28 onward. Prime Minister Narendra Modi initially announced the program during his Independence Day address in August 2025, emphasizing a mission-mode approach to uncovering offshore energy reserves. Petroleum Secretary Neeraj Mittal described the framework as the most ambitious upstream oil and gas intervention in recent times, projecting an addition of more than 600 million tonnes of oil equivalent to national reserves.

Beyond direct well funding, a second track offers viability gap funding for shared infrastructure projects aimed at connecting stranded or small discoveries into unified production networks. Priority is given to basins like Mahanadi and Kutch, where individual fields remain commercially unviable on a standalone basis due to high pipeline and processing costs. Participating operators must form joint ventures or special-purpose vehicles to construct and own these hubs under fair and non-discriminatory access rules. Funding is distributed across four equal tranches tied to physical progress, with strict provisions allowing officials to suspend payments or reclaim disbursed money if milestones are missed.

A third track of the initiative targets the creation of specialized oil and gas manufacturing and services zones equipped with utilities, jetties, warehouses, and testing facilities to establish India as a global fabrication hub. Developers must secure land and clearances independently before marketing space to tenants, with monitoring protocols requiring annual reports on occupancy, investments, and job creation for five years following commissioning. Additionally, the Directorate General of Hydrocarbons will oversee a fully government-funded seismic data collection program to underpin the broader upstream push.