Oil Exploration in Andaman-Nicobar Basin: A New Frontier for
India's Energy Security
— Explained for
UPSC Aspirants by Suryavanshi IAS
🛢️
The Context: A Bold Vision
Union Petroleum Minister Hardeep Singh Puri, in a recent interview, remarked that
it is only a “matter of time” before India discovers a Guyana-like oil basin in the Andaman Sea. He asserted
that this could help catapult India’s
economy from a $5–7 trillion level to a potential $20 trillion economy, if supported by
strategic exploration and policy reform.
But why is this region suddenly grabbing so much attention? And what makes the Andaman-Nicobar Basin a game-changer?
📍
Why the Andaman-Nicobar Basin is Geologically Significant
·
The Andaman Basin is located in the southeastern Bay of Bengal and spans
around 2.25 lakh square kilometers.
·
It is largely unexplored
or “unappraised” — making it one of the last
undrilled hydrocarbon frontiers in the world.
·
It lies adjacent to two gas-rich regions:
o North Sumatra (Indonesia)
o Irrawaddy-Margui (Myanmar)
·
Both these basins have seen significant oil and gas discoveries,
enhancing the chances that India’s Andaman region holds untapped potential.
🧭 A significant development was the Deep Andaman Offshore Survey, implemented by Oil India Ltd in 2020, and the findings were added to the National Data Repository (NDR) by 2023. The survey identified mud volcanoes and oil-gas bearing formations in Middle and South Andaman (e.g., Baratang formations).
🔄
What Changed the Exploration Game?
The real push came from the Hydrocarbon Exploration and Licensing Policy
(HELP), launched in 2016.
Here's how it changed the paradigm:
1. Open
Acreage Licensing Policy (OALP):
·
Investors can choose any block they want to explore — no need to wait
for government notification.
·
Access to data
from the National Data Repository allows better-informed decisions.
2.
Revenue Sharing Model (vs. Production Sharing earlier):
·
Simplified financial mechanism.
·
Greater transparency.
·
More attractive to foreign companies.
💡 For example, ONGC signed a collaboration deal with TotalEnergies (France) in 2023 to explore offshore blocks including in Andaman and Mahanadi.
📊
Status So Far: Progress through OALP
·
So far, 8
bidding rounds have taken place:
o 144 exploration blocks awarded
o Investment committed: $3.37 billion
·
9th Round:
Offered 28 blocks (1.37 lakh sq.
km).
·
10th Round
(April 2025): 25 new blocks offered (1.92 lakh sq. km), 4 of them in Eastern Andaman.
· ONGC and Oil India have already secured two blocks each in this region.
💰
Opportunities vs. Ground Realities
🌟 Opportunities:
·
India imports 90.6% of its crude oil — any domestic success reduces foreign dependency.
·
Potential to boost GDP, create jobs, and develop remote island
regions.
·
If successful, could replicate the Guyana model, which saw:
o 47% average GDP growth since 2022
(highest globally).
o Oil GDP growth of 58% in 2024 alone.
⚠️ Challenges:
·
High Cost
of Offshore Drilling: Much more expensive than onshore or shale.
·
Long
Timeframes: Exploration to production can take years or even a decade.
·
Price
Volatility Risk:
o If
oil prices crash, offshore
investment becomes economically unviable.
o For
instance, Rystad Energy notes
that offshore sites are profitable only
when prices are high.
·
Environmental
& Strategic Concerns:
o Many parts of the basin were earlier classified as ‘No-Go Zones’ for ecological sensitivity or defence reasons.
🌍
Global Parallel: Guyana’s Oil Miracle
Guyana's case offers a hopeful lens. In less
than a decade, the country:
·
Went from zero
to one of the world’s fastest-growing economies.
·
Attracted major oil companies like ExxonMobil.
·
Built offshore infrastructure to fuel national transformation.
Yet, IMF warns of risks:
“Commodity price volatility, trade
disruptions, and climate shocks can affect inflation and alter the
macroeconomic outlook.”
India must be cautious and build resilience into its oil strategy.
🔎
UPSC Relevance: GS Paper II & III
·
GS Paper
II (Governance & Policy): HELP, OALP, Centre-State coordination,
environmental clearances.
·
GS Paper
III (Economy & Resources): Energy security, oil dependency,
foreign investment, technological challenges.
Prelims
Takeaway Points:
·
HELP launched: 2016
·
OALP concept: Investor-chosen blocks
·
National Data Repository: Digital database of India’s sedimentary basins
·
Andaman Basin size: 2.25 lakh sq. km
· India’s oil import dependency: 90.6%
✅ Conclusion: Why This Matters
The Andaman-Nicobar basin may become the next frontier in India's oil journey.
Strategic policy reforms, foreign collaborations, and improved geophysical data
have re-energised exploration. However, economic
viability, environmental sensitivity, and global price stability will be key determinants of
success.
For India to reduce its energy dependency and emerge as a global economic power, “Energy Security” isn’t just an aspiration — it's a national priority.
✅
Examples of UPSC Questions (Previous Years)
🧭
Prelims Questions:
- UPSC Prelims 2017
Q. With reference to the 'Indian Ocean Dipole (IOD)' sometimes mentioned in the news while forecasting Indian monsoon, which of the following statements is/are correct?
(This tests your awareness of oceanic influences including the Andaman Sea region.) - UPSC Prelims 2018
Q. With reference to oil spills, which of the following statements are correct?
(Tests offshore oil production and environmental risks.) - UPSC Prelims 2020
Q. Consider the following statements about production sharing contracts and revenue-sharing contracts in India.
(Directly touches on the difference between the old PSC and new HELP regime.)
🧭
Mains Questions:
- GS Paper III – UPSC Mains 2020
Q. “What are the challenges in the production and distribution of crude oil in India? Discuss how the Hydrocarbon Exploration and Licensing Policy (HELP) attempts to address these.”
(Very relevant to the Andaman exploration topic.) - GS Paper III – UPSC Mains 2017
Q. “Examine the potential of offshore energy resources in India and discuss the steps taken to harness them effectively.” - GS Paper III – UPSC Mains 2021
Q. “Energy security is critical to India’s economic progress. Analyse the initiatives taken by the Government of India to achieve energy self-sufficiency.” - GS Paper II – UPSC Mains 2022
Q. “Policy formulation and execution in energy sectors require multi-stakeholder coordination. Illustrate with suitable examples.”
🔖
Bonus: Probable Questions for Future UPSC (Based on This Topic)
Prelims:
- With reference to the Open Acreage Licensing Policy
(OALP), consider the following statements…
- Baratang formation, recently in news, is associated
with which of the following?
Mains:
- "The Andaman-Nicobar Basin can play a
transformative role in India’s energy security strategy." Discuss in
the context of recent oil exploration initiatives.
- Evaluate the Hydrocarbon Exploration and Licensing
Policy (HELP) and its impact on India’s offshore oil exploration
prospects.
✍️
Prepared by:
Suryavanshi IAS Team
Empowering Aspirants with Insightful Analysis
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