India's Quest for a Major Oil and Gas Discovery in the Andaman Basin
As India's reliance on imports for crude oil and natural gas escalates due to rising domestic demand, the country is focusing on the Andaman basin for a potential major discovery. The recent natural gas occurrence reported by Oil India Ltd (OIL) in this region has sparked hopes of reducing import dependency.
Recent Developments in Andaman Exploration
- Oil India Ltd reported the first 'occurrence' of natural gas from its exploratory well, Vijayapuram-2, in the offshore Andaman block AN-OSHP-2018/1.
- An 'occurrence' indicates physical evidence of hydrocarbons, while a 'discovery' confirms commercial viability.
- Further testing and evaluation are needed to determine the commerciality of the block.
- The Andaman basin's proximity to petroleum reserves in Myanmar and Indonesia adds strategic significance.
Importance of the Andaman Discovery
- India's last significant oil discovery was Mumbai High in 1974 and the Krishna-Godavari basin in the early 2000s.
- India's reliance on imports has increased to 87% for crude oil and around 50% for gas.
- If viable, the discovery could attract major international oil companies (IOCs).
- Recent legislative changes like the Oilfields (Regulation and Development) Act, 2025, support exploration efforts.
Potential and Challenges of the Andaman Basin
- Considered a Category II basin with potentially high hydrocarbon reserves.
- Experts estimate the Andaman basin could hold around 371 million metric tons of oil equivalent.
- Production could take up to a decade due to technological and geographical challenges.
- Deepwater well drilling costs exceed $100 million per well with success rates around 20-30%.
The Andaman basin holds promise for India's energy security, but substantial time and investment are required to realize its potential.
