State-run oil explorers ONGC and Oil India Ltd are planning to begin an INR 3,200 crore stratigraphic drilling campaign in untapped offshore areas early next year, as part of efforts to discover new hydrocarbon reserves and cut reliance on imports. The campaign will target deep-sea sedimentary basins with technical expertise provided by global energy giant BP.

Drilling Locations and Timeline

In the first phase, four wells will be drilled in deep-sea areas of Andaman, Mahanadi, Saurashtra, and Bengal sedimentary basins. BP will provide technical expertise in identifying the locations as well as drilling operations. An official involved in the process stated that ONGC has indicated they have a rig available, with drilling expected to commence sometime in early 2026.

The drilling campaign represents stratigraphic drilling, also known as a stratigraphic test well, which is a type of exploratory drilling aimed at studying underground geological formations rather than producing oil or gas. These wells are drilled to gather data on subsurface layers through continuous coring, petrophysical logging, and seismic data integration.

Government Funding and Cost Structure

The government has agreed to compensate Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) for the cost of the stratigraphic drilling campaign. The INR 3,200 crore estimated cost also includes a fee to be paid to BP for its services. This financial arrangement allows the state-run companies to pursue exploration in previously untapped offshore areas without bearing the full financial risk.

The objective of the stratigraphic drilling is to build a detailed geological profile to support future hydrocarbon exploration, without any immediate intent to extract resources. This approach will help reach a decision on whether the targeted areas hold hydrocarbon resources that could be commercially produced.

Ownership and Monetization Framework

The blocks or areas where the stratigraphic drilling is to take place are currently owned by the government, which will have sole authority to decide how any discovery has to be monetized. Officials indicated that monetization could occur either through auctioning the area or giving it to a company or a consortium on a nomination basis. The role of BP in any potential monetization remains unclear.

It is entirely possible that BP could demand a first right of refusal (ROFR) in any development, potentially securing a predefined percentage of stake in any consortium that monetizes a discovery. However, nothing has been conveyed regarding BP's intentions in this regard.

Strategic Objectives

The drilling campaign forms part of broader efforts to discover new hydrocarbon reserves and reduce India's reliance on imports. By targeting untapped offshore areas in multiple sedimentary basins, the initiative aims to expand the country's domestic energy resource base through systematic exploration of deepwater prospects. The stratigraphic approach allows for a comprehensive geological assessment before committing to full-scale exploration and production activities.

This methodology provides detailed subsurface information that can inform future investment decisions and development strategies for any discovered hydrocarbon resources.

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