With survey completed in Andamans, India may now proceed with oil exploration

Basins in Andaman are expected to be sitting on large reserves of hydrocarbons

India completed the data collection for the exhaustive survey of the Andaman offshore area last week and is moving closer to beginning exploration activities in the region after the government opened up the once "no-go" areas for exploration, officials in the know told Moneycontrol.

The survey of the Exclusive Economic Zone (EEZ), backed by the Directorate General of Hydrocarbons (DGH), has acquired over 22,000 line kilometres (LKM) of two-dimensional (2D) data in the region.

The government of India has taken several measures to support exploration in the Andamans, such as opening up acreages and encouraging foreign players to invest in the area, Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, told Moneycontrol on the sidelines of an event recently.

"We had to make changes. Most of our sedimentary basins were not open for exploration because somewhere Coast Guard had a problem, somewhere DRDO had a problem. We have opened up that space now," said Puri.

ALSO READ: Govt taking strenuous steps to scale up oil exploration, production: Oil Minister Puri

The government plans to fund the drilling of a few exploratory wells in the region. Separately, two state run-companies, Oil and Natural Gas Corporation Ltd (ONGC) and Oil India Ltd (OIL), have completed surveys and initiated exploratory activities for their blocks in the region.

Sushma Rawat, Director (Exploration), ONGC, told Moneycontrol that the 2D data collection for the DGH-backed survey of the EEZ was completed last week and the data will be processed soon.

"This is the first time it is being called island exploration; there have been phases of it over the years. Andaman is seeing a renewal of exploration activities, which is good," said Rawat.

The DGH had earlier said that the new data along with the legacy data will be made available through the National Data Repository, which is being upgraded to cloud-based virtual data rooms so that investors can access it.

What’s at stake?

According to the DGH, Andamans is a ‘Category II’ basin, which implies that the basin has sub-commercial discovery in place. The basin has an area of 225,918 square kilometres with 18,074 sq km shallow water area and 207,844 sq km deepwater area.

"The Andaman basin has a total hydrocarbon in place of 72 MMTOE (metric million tonnes of oil equivalent), out of which 2 MMTOE have been discovered and this is now entirely sub-commercial in place. The remaining 70 MMTOE, nearly 97 percent of the total in place is the potential to be explored and discovered," DGH said in its India Hydrocarbon Outlook 2022-23.

In terms of awarded acreage that is now active in the Andamans basin, 23,245 sq km are under the Hydrocarbon Exploration and Licensing Policy (HELP). DGH said in the report that in the upcoming Offshore Mega Open Acreage Licensing (OALP) Round IX, there is an opportunity for 53,099 sq km prospective areas in back-arc regions that are carved into four blocks, all located in ultra deepwater.

ONGC in Andaman

ONGC has completed the survey for the two blocks it has in the Andamans from the sixth round of OALP.

"We are in the process of finalising the location for the minimum work programme. We will be taking up drilling one well in each block," Rawat said.

Rawat said that ONGC is keen to look at more blocks in the Andamans when they come up for bidding.

"We are waiting for the ninth round to come up. DGH has earmarked the offshore blocks. As of now, ONGC has two blocks in the Andamans offshore deepwater from the OALP sixth round," she said.

OIL in Andaman

The basins in Andaman are expected to be sitting on large reserves of hydrocarbons. India is pushing for oil and gas exploration activities in the Andaman basin as the government focuses on domestic production for energy security.

Similarly, OIL said it submitted the survey involving the acquisition, processing, and interpretation of 22,500 LKM of 2D broadband seismic data in the Andaman-Nicobar basin to DGH on March 31, 2023.

Manas Kumar Sharma, Director (Exploration and Development), OIL, told Moneycontrol that talks are ongoing with foreign companies for exploration activities in the Andamans.

He said OIL has not yet started drilling in the Andamans and the company is mobilising the services for commencement of drilling. OIL has identified three potential drilling locations in the Andaman-Nicobar basin blocks, the company said.

"The final decision regarding bidding on these blocks has not yet been taken. We are evaluating the prospectivity of the offered blocks, and necessary due diligence is ongoing," Sharma commented with regard to OALP Round IX.

Who else is interested?

The basins in the Andamans are expected to contain large reserves of hydrocarbons. India is pushing for oil and gas exploration activities in the Andaman basin as the government focuses on domestic production for energy security, and this has attracted the attention of international players as well.

While foreign players such as ExxonMobil, Chevron, and TotalEnergies are understood to be keen on exploration in this area and have initiated talks with state-run companies for potential partnerships, the companies await clearances from the government. Queries sent to these companies remained unanswered.

Exploration activities in the Andamans have been long delayed, awaiting clearances from DRDO, space agencies, the Coast Guard, and other agencies.

Minister Puri said, "You need to make data available, and you need a change in the mindset. Earlier, people would not come for exploration. Now, we are incentivising exploration. You don't even need to spend your own money. If you have the expertise, we are willing to incentivise it."

Puri said global oil giants that are in exploration have tied up with Indian entities, and all of them are at different stages. At some places, resources have been allocated, and they are at fairly advanced stages, he added.