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June 17, 2025

India on Brink of Major Oil Discovery in Andaman Sea

A major breakthrough is on the horizon for India as officials signal the possibility of a significant oil discovery in the Andaman Sea. Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, has drawn comparisons between this potential find and the massive oil reserves discovered in Guyana, which currently boasts around 11.6 billion barrels of oil and gas, placing it among the world’s leading oil-rich nations.

This development is particularly important for India, a country that currently imports over 85 per cent of its crude oil needs. Between April 2024 and January 2025 alone, India imported about 200 million metric tonnes of crude oil, putting a heavy burden on the economy. The government’s focus on domestic oil exploration aims to ease this dependence and strengthen the nation’s energy security.

Exploration in the Andaman basin is being led by public sector giants such as Oil India Limited (OIL) and Oil and Natural Gas Corporation (ONGC). OIL has started drilling the Vijaya Puram-1 well in the shallow offshore waters of the Andamans, using the advanced ‘Blackford Dolphin’ rig. This region, one of India’s least explored offshore areas, is believed to have great potential due to its geological similarities with other hydrocarbon-rich zones in Southeast Asia.

A New Era for India’s Energy Sector

The government has introduced several reforms since 2016, including the Open Acreage Licensing Policy (OALP), which has opened up nearly one million square kilometres of sedimentary basins for exploration. The latest round of bidding has seen increased interest from both domestic and global players, with a significant portion targeting these newly available areas.

Minister Puri has highlighted that ONGC drilled a record 541 wells in the financial year 2024, the highest in 37 years, showing renewed momentum in the sector. Recent legislative changes, such as the Oil Fields Regulation and Development Amendment Bill, are expected to simplify regulations and encourage more private investment.

If the Andaman Sea discovery matches the scale of Guyana’s reserves, it could transform India’s economic landscape. Minister Puri has suggested that such a find could help India’s economy grow from its current $3.7 trillion to as much as $20 trillion in the future. For the Andaman and Nicobar Islands, this would bring new jobs, infrastructure, and investment, improving local economies and services.

India now stands at the threshold of a game-changing oil discovery. With ongoing drilling, supportive policies, and rising investor interest, the country could soon reduce its reliance on imports and boost its economic prospects significantly.

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