India has just turned a significant page in its energy story. Last week, Union Petroleum Minister Hardeep Singh Puri confirmed the presence of natural gas in the Andaman basin, calling it “an ocean of energy opportunities.”
The announcement marks a milestone in India’s deepwater exploration ambitions and opens the door to potentially transformative energy and economic outcomes.
So far, only natural gas has been confirmed, not oil.
The discovery at a glance
According to Puri, the find comes from the Sri Vijayapuram-2 well, drilled about 17 kilometres from the east coast of the Andaman Islands, at a water depth of 295 metres and a target depth of 2,650 metres.Initial production testing of the well between 2,212 and 2,250 metres established the presence of natural gas, with intermittent flaring. Gas samples brought to Kakinada were found to be 87 per cent methane.
“An ocean of energy opportunities opens up in the Andaman Sea! Very happy to report the occurrence of natural gas in Sri Vijayapuram 2 well… The size of the gas pool and commercial viability of the discovery will get verified in the coming months, but establishing the presence of hydrocarbons in the Andaman basin is a major step,” Puri said in a tweet, adding that the discovery aligns with hydrocarbon finds from Myanmar to Indonesia along the same geological belt.
Oil India Limited (OIL), a Maharatna company under the Ministry of Petroleum and Natural Gas, reported the find in its second exploratory well drilled in the Andaman Shallow Offshore Block AN-OSHP-2018/1, obtained under the Open Acreage Licensing Policy (OALP).
While OIL did not provide an estimate of the size of the reserves, it called the occurrence a significant step in understanding the basin’s hydrocarbon potential, which includes both natural gas and, potentially, oil.
Why this discovery matters
There are several dimensions to the significance of this discovery.
First, the confirmed discovery is natural gas, which validates India’s long-held belief that the Andaman basin is rich in hydrocarbons. Union Minister Puri has compared the basin’s potential to the Guyana oil field, a find that transformed the South American nation’s energy and economic outlook.
“It’s only a matter of time before we find a big Guyana in the Andaman Sea,” Puri told The New Indian earlier, citing ongoing drilling and green shoots of oil in other areas.
Second, the discovery reinforces Prime Minister Narendra Modi’s National Deep Water Exploration Mission, announced on Independence Day. The mission, referred to as a “Samudra Manthan,” aims to explore oil and gas reserves in India’s offshore basins in Mission Mode, reflecting a push for energy self-reliance and strategic autonomy.
“We are now also heading towards ‘Samudra Manthan.’ Taking this forward, we aim to operate in Mission Mode to explore the oil and gas reserves in the sea. So, India is about to launch the National Deep Water Exploration Mission,” PM Modi said.
Puri highlighted that the find will support exploration in coordination with global deepwater experts like Petrobras, BP India, Shell, and ExxonMobil.
Third, the find could bolster India’s green energy transition. Methane, the primary component of the gas discovered, burns cleaner than coal and oil, offering a path to reduce both air pollution and greenhouse gas emissions.
Economic and strategic potential
Prateek Pandey, Head of APAC Oil and Gas Research at Rystad Energy, told CNBC that the recent discovery in the Andaman basin could significantly boost India’s domestic natural gas production. He said, “Oil from the Andaman basin will help India meet at least 50 per cent of its energy needs.” This is based on projected oil-equivalent hydrocarbons from seismic surveys, not actual oil extraction.
Currently, these estimates are based solely on seismic surveys — no commercial production has started yet. Pandey explained, “The untapped potential is around 307–370 million metric tons of oil equivalent, which could theoretically double India’s current domestic production.” This makes the discovery both an economic and political priority for the government. He added, “Significant efforts are underway to attract investors and increase drilling activity, so these results can be realised.”
This situation is typical in the global energy sector, where initial surveys show potential, but it takes years to confirm commercial viability. Pandey cautioned, “Commercial drilling and extraction may take up to a decade, as the country formalises joint venture agreements and navigates frontier-area development.”
Exploratory efforts have already covered over 8,000 kilometres of 2D and 3D seismic surveys, suggesting the basin holds roughly 370 million metric tons of oil-equivalent hydrocarbons.
For context, India currently consumes roughly 270–300 million tons of oil equivalent per year. By comparison, the United States consumes 800–950 million tons annually, and China consumes 650–750 million tons annually.
On the geopolitical front, Pandey reassured, “Territorial boundaries are distinct, and disputes with neighbouring countries are unlikely,” despite the Andaman basin being near a busy maritime trade route.
He emphasised that the timeline is critical: “Bringing resources from initial discovery to commercial production could exceed a decade,” which aligns with global norms where frontier energy projects often take 15–20 years from first surveys to sustained output.
Analysts note that full-scale commercial exploitation remains years away, with further studies and higher-prospect drilling needed to confirm the size and economic viability of the find.
From discovery to development
The journey from initial survey to commercial production is long and capital-intensive. Pandey explained that companies typically begin with seismic surveys, followed by investment once results look promising.
India’s state-owned companies, including ONGC and Oil India, are leading early drilling, while foreign investors are being invited for partnerships to provide technical expertise.
“The Petroleum Minister even compared it to the discovery in Guyana. But it’s not hyperbole; before the Guyana field was confirmed, there were over 50 dry wells,” Pandey added.
Puri highlighted that the cost of exploratory wells is significant.
In Guyana, for instance, companies drilled 43 or 44 wells at roughly $100 million each before hitting success. In India, ONGC drilled a record 541 wells in FY24 — 103 exploratory and 438 development — investing ₹37,000 crore, its highest capital expenditure ever.
Potential impact on energy security and the economy
Currently, India relies heavily on imported natural gas.
In 2023–24, about 44 per cent of consumption was met through imports, primarily liquefied natural gas (LNG), according to Argus Media, reported by FirstPost. For crude oil, over 85 per cent is imported, making India the world’s third-largest oil importer. The Andaman discovery, if commercialised, could substantially reduce this dependence.
Additionally, earlier, Puri has painted a bold vision: a Guyana-scale oil find in the Andaman Sea could hold up to 184,440 crore litres of crude oil, potentially expanding India’s economy from $3.7 trillion to $20 trillion.
“Apart from smaller finds, a large-scale oil discovery in the Andaman region, similar to Guyana’s, could help reshape India’s energy landscape,” he had said.
Within India, current oil production is concentrated in Assam, Gujarat, Rajasthan, Mumbai High, and the Krishna-Godavari Basin, with strategic petroleum reserves maintained at Visakhapatnam, Mangalore, and Padur.
Now, exploration is expanding to the Andaman and Nicobar Islands, with companies like Oil India and ONGC taking the lead.
Next steps
The discovery also has the potential to create jobs across extraction, transport, and distribution, while strengthening India’s energy security. By developing domestic methane infrastructure, the country could lower its reliance on imports, achieve cleaner energy targets, and attract global investment in frontier exploration.
While commercial production may still be a decade away, the discovery lays a robust foundation for an “ocean of opportunities” that could redefine India’s energy landscape in the decades to come.
