India needs to boost domestic oil and gas exploration to enhance its energy security amid supply disruptions that drive energy prices higher, according to a senior official at state-owned exploration and production company Oil India Limited (OIL).<\/p>\n
\u201cDisruptions to global supply chains and major energy corridors can have an immediate impact on energy flows, prices and economies worldwide,\u201d IOL\u2019s Director of Finance, Abhijit Majumder, said at an energy industry event in India, as carried by local media<\/a>.<\/p>\n The Strait of Hormuz crisis is one example of how geopolitical instability in one corner of the world could threaten energy security in all other regions, the executive said.<\/p>\n India\u2019s government has an ambitious plan to boost exploration, following three consecutive years<\/a> in which domestic crude oil production has declined.<\/p>\n This year, the federal government launched<\/a> the so-called National Offshore Exploration Scheme, with $8.8 billion in government support through FY 2030\u201331. The scheme is India\u2019s most ambitious offshore exploration mission to date.<\/p>\n As part of the program, the government will provide financial support of up to 50% of the cost of drilling deepwater exploration wells. The support will reduce exploration risk, encourage investment, and accelerate the development of India’s offshore hydrocarbon potential, according to the government.<\/p>\n India’s future hydrocarbon potential lies largely in deepwater and ultra-deepwater basins such as Krishna-Godavari, Cauvery, Mahanadi, and the Andaman region. Exploration in these frontier areas requires advanced technology and significant investment, with a single deepwater exploratory well costing about $125\u2013150 million.<\/p>\n \u201cRecognising the high-risk, high-cost nature of such exploration, the Government is adopting a risk-sharing approach to encourage sustained investment, accelerate exploration, and unlock India’s offshore hydrocarbon resources,\u201d the federal government said.<\/p>\n As part of strengthening energy security, India also plans to build new storage sites<\/a> as the world\u2019s third-largest crude oil importer looks to boost its resilience to supply shocks.<\/p>\n By Tsvetana Paraskova for Oilprice.com<\/a><\/p>\n