India’s big push for oil & gas exploration in Andaman

India is making a big push for oil and gas exploration in Andaman deep water basin with the government planning to fund an ONGC-led drilling campaign and easing clearances, according to people familiar with the matter.

Increasing exploration at a break-neck speed is at the centre of the government’s plan to raise domestic production of oil and gas and cut imports at a time when high fuel prices are tormenting consumers.

ONGC NSE -1.26 % plans to launch the drilling campaign in the Andaman offshore after the monsoon and is currently engaged in talks with ExxonMobil and Shell to involve them in the project, they said. ONGC is expected to drill 3-4 wells under the special programme funded by the government in the Andaman Sea, with each well costing about Rs 350-400 crore, they added.

The government has acquired 22,500-line kilometre of 2D seismic data under its “National Island Exploration Project” over the area classified as “No-Go” zone and is planning to fund the drilling of a few assessment wells in these areas.

ONGC has studied the data but wants a third-party assessment by foreign companies with deep-water experience. It plans to engage global companies or consultants for an assessment of the Andaman basin, petroleum system modelling studies, and de-risking of identified prospects before drilling, people cited above said.

ONGC has initiated discussions with ExxonMobil and Shell to seek their views on the Andaman prospects as well as to rope them in as partners if they show interest in the project, they said.

The government has provided exemptions from defence and space department clearances, people said. Difficulty in obtaining such clearances in the past had crippled the exploration programme in the Andaman waters. The Centre is also working on the modalities for providing long-term clearances to the operator if a major discovery is made during the planned drilling programme.
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