Page 47 - Policy Economic Report - July 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

following significant gas discoveries in South Andaman offshore Indonesia, underlining the geological
continuity across the region.

While the favourable geology sets a strong foundation, Shri Puri emphasized that the real breakthrough
has come from the government’s strategic policy interventions and a new exploration approach. The
revised strategy has enabled aggressive acquisition of seismic data, initiation of both stratigraphic and
exploratory drilling, and increased engagement with international exploration partners, several of whom
have shown keen interest in the newly accessible frontier blocks.

National Oil Companies have planned to drill four offshore stratigraphic wells, including one in the AN
basin. These scientific wells are designed to test geological models, validate the existence of petroleum
systems, and help de-risk future commercial exploration. Although commercial accumulations have not
yet been confirmed, these efforts mark a major step forward in systematic and knowledge-driven
hydrocarbon exploration.

In a significant development, ONGC and Oil India Ltd (OIL) have launched an ambitious exploration
campaign in the Andaman ultra-deepwater region. For the first time, drilling operations are targeting
depths of up to 5000 metres. One such wildcat well, ANDW-7, drilled in a carbonate play in the East
Andaman Back Arc region, has yielded encouraging geological insights. These include traces of light crude
and condensate in cutting samples, heavy hydrocarbons like C-5 neo-pentane in trip gases, and the
presence of reservoir-quality facies. These findings establish, for the first time, the existence of an active
thermogenic petroleum system in the region, comparable to those in Myanmar and North Sumatra. While
commercial reserves remain to be established, this campaign has validated the presence of a working
petroleum system and laid the foundation for focused exploration in the area.

Providing an overview of the exploration outcomes so far, the Minister informed that ONGC has made
hydrocarbon discoveries in 20 blocks, with an estimated reserve of 75 million metric tonnes of oil
equivalent (MMTOE). OIL, on its part, has made seven oil and gas discoveries over the past four years,
with reserves estimated at 9.8 million barrels of oil and 2,706.3 million standard cubic meters of gas.

Referring to the Hydrocarbon Resource Assessment Study (HRAS) of 2017, which estimated the AN basin’s
hydrocarbon potential at 371 MMTOE, the Minister stated that a 2D broadband seismic survey covering
approximately 80,000 Line Kilometres (LKM) of India’s Exclusive Economic Zone, including the AN offshore
region, was completed in 2024. Additionally, OIL acquired 22,555 LKM of 2D seismic data during the Deep
Andaman Offshore Survey conducted in 2021–22. Several promising geological features have emerged
from this data, which are now being validated through ongoing drilling campaigns by ONGC and OIL.

Shri Puri underscored that the current momentum in offshore and frontier exploration is a result of a
series of progressive policy reforms introduced since 2014. These include the transition from the
Production Sharing Contract (PSC) regime to the Revenue Sharing Contract (RSC) model in 2015, the
launch of the Hydrocarbon Exploration and Licensing Policy (HELP) and the Open Acreage Licensing
Programme (OALP) in 2016, the establishment of the National Data Repository in 2017–18, and the
deregulation of crude oil marketing in 2022. Together, these measures have fostered a liberal, investor-

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