Govt. to fund half the cost of deepwater wells, recover money from winners
The Indian government has launched the 'Samudra Manthan' scheme to fund up to 50% of the costs for risky deepwater oil and gas exploration. The state will absorb losses if wells are dry, but will recover its investment from successful projects once commercial production begins.
Why it matters
This policy aims to incentivize domestic energy production and reduce reliance on imports by mitigating the high financial risk associated with deep-sea drilling.
Govt. to fund half the cost of deepwater wells, recover money from winners left Offshore Jack Up Drilling Rig Over The Production Platform in The Middle of The Sea bomboman Getty Images/iStockphoto https://th-i.thgim.com/public/news/national/pf1yxl/article71622766.ece/alternates/FREE_1200/iStock-486202904.jpg bomboman Offshore Jack Up Drilling Rig Over The Production Platform in The Middle of The Sea That recovery clause, set out in newly issued operational guidelines, is the scheme's central bargain — the government carries early geological risk and keeps a claim on any upside New Delhi The government will pay up to half the cost of risky deepwater exploration wells under its ₹84,084 crore Samudra Manthan scheme, but expects to be repaid from revenue if a well finds oil or gas. If it finds nothing, the State absorbs the loss. What is the Samudra Manthan scheme all about?
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