Petroleum ministry issues operational guidelines for Samudra Manthan offshore scheme
The Ministry of Petroleum and Natural Gas has issued operational guidelines for Samudra Manthan, the National Offshore Exploration Scheme. They were published on its website this week. They set how the scheme will fund 60 deepwater and ultra-deepwater wells. Support for most wells is capped at ₹675 crore. The money is recoverable when a well yields a commercial discovery.
Syllabus: GS3 · Indian Economy & Growth; Prelims · Current Affairs & IR; GS3 · Infrastructure
Why this matters for UPSC
GS3 energy infrastructure: Prelims can ask what HELP, Revenue Sharing Contracts, OALP and the National Data Repository provide, and how deepwater is defined. GS3 Mains can ask whether public money should share offshore exploration risk.
Why it matters
Deep-sea wells are costly bets: a company can pay for a well and find nothing, which officials say is why private firms have largely kept away from such risk exploration in India. Under these rules the government pays part of the bill up front. It asks for its money back only when a well becomes a paying field, so taxpayers carry some of the losses and recover their share from the winners. More home-grown oil and gas would leave households and industries less exposed when a conflict in West Asia cuts supplies and pushes up fuel prices. The milestone payments and outside checks decide whether public money goes to sound prospects or to poorly planned wells.
Prelims pointers
- Hydrocarbon Exploration and Licensing Policy (HELP), 2016: one licence covers conventional oil and gas, coal-bed methane, shale oil and gas hydrates, with marketing and pricing freedom for gas.
- Open acreage licensing under HELP: companies carve out blocks of their choice and file an Expression of Interest any time of year, without awaiting a bid round.
- National Data Repository: set up by DGH on behalf of the Ministry of Petroleum and Natural Gas; the Open Acreage Licensing Programme was launched with it on 28 June 2017.
- Discovered Small Field policy: the earlier Marginal Field Policy, renamed under HELP, offers already discovered fields to investors on revenue-sharing terms.
- Oilfields (Regulation and Development) Amendment Act, 2025: delinked petroleum operations from mining law and brought in a single petroleum lease, with stable lease terms and faster dispute resolution.
- Production Sharing Contract: the contractor first recovered its costs, after which the profit was split with the government.
Practise a UPSC-style question
With reference to the Hydrocarbon Exploration and Licensing Policy (HELP), consider the following statements:
1. A single licence under it covers conventional oil and gas as well as coal-bed methane and shale oil.
2. Under its Revenue Sharing Contract, the contractor recovers its exploration costs before the government's share is worked out.
3. It introduced open acreage licensing, letting companies propose blocks without waiting for a government bid round.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Show the answer
Answer: (c) 1 and 3 only
Answer: (c) 1 and 3 only. Cost recovery belongs to the old Production Sharing Contract, not to HELP's revenue-sharing model.
Statement 1: correct. HELP's single licence covers all hydrocarbons: conventional oil and gas, coal-bed methane, shale oil and gas hydrates.
Statement 2: incorrect. Under a Revenue Sharing Contract the government takes a share of gross revenue with no cost recovery; recovering costs first was the Production Sharing Contract.
Statement 3: correct. Under open acreage licensing, companies carve out blocks and file an Expression of Interest at any time of the year.
Eliminate: Statement 2 is the surest call, since no cost recovery is the defining feature of revenue sharing. Out: (a), (b), (d).
Trap: Swapped attribution. The cost-recovery feature of the Production Sharing Contract is pinned on the Revenue Sharing Contract that replaced it.
Remember: PSC = recover costs, then split profit; RSC (HELP, 2016) = share of gross revenue, no cost recovery.
More from the 24 October 2026 edition
- IAEA tells UN General Assembly nuclear power could triple by 2060 World & IR
- Haryana directs HERC under Section 108 to halt parallel power licence Polity
- NSO proposes PLFS redesign from 2027 to count platform workers Economy
- Karnataka HC: six guidelines curb mechanical FIRs, arrests over social-media posts Polity
- IMD forecasts Bay of Bengal cyclone heading for north Andhra, south Odisha Environment
- NMC withdraws 2023 medical education standards regulations, ends annual renewal Polity
- Orissa High Court: road pandals may stand if movement stays open Polity
- MHA tells Supreme Court of over 21,900 digital arrest complaints in 2026 National
- Jharkhand HC quashes Sentence Review Board's 'preordained' refusal of premature release Polity
- Allahabad HC: POCSO compensation cannot be refused for lack of injury Polity
- MoRTH draft proposes mandatory emergency braking (AEBS) in cars from 2030 National
- Kerala HC: State liable for wild-animal attacks despite not owning animals Environment