India Is Looking For Its Own Daqing Oilfield

The move aims to boost domestic oil and gas production by tapping deep-sea reserves. The Andaman Sea Basin contains approximately 22 billion barrels of oil equivalent undiscovered hydrocarbon potential, as per S&P Global data. The extent of such a reserve is the equivalent of 12 years' worth of India's current-day oil consumption. Puri said that the ongoing exploration and development activity in the Andaman Sea would make India the next "Guyana" - i.e., the sea block could replicate Guyana's energy miracle and make India the next energy superpower.
01 The "ambition" to find a giant oilfield Recently, in the course of the interview of Hardeep Singh Puri, Indian Minister of Petroleum and Natural Gas, by the New Indian Express, he officially announced that India has revived the exploration permit for some blocks in the Andaman Sea and asserted categorically that the country has cemented its regulatory framework in the form of a new act. This chain of events highlights the strategic development of India's energy industry in oil and gas exploration. According to Puri, the new open-block permit policy sets the focus area of exploration as around 1 million square kilometers out of the total sedimentary basin of 3.5 million square kilometers. This historical ruling promptly triggered a response in the market: in the ongoing ninth round of bidding, 37%-38% of the block applications were concentrated in this area; and is projected to strike as much as 80% in the next round of bidding. Notably, the scale of this bidding set a record in history by covering an area of 250,000 square kilometers, indicating high interest in energy firms for the region. Referring to the optimism regarding exploration, Puri equated the resource potential of the Andaman Sea with that of "Guyana", an "energy miracle", after the satisfactory performance of early oil wells such as Suriyamani and Nirmalmani. He particularly underscored that the Indian Ocean region could have oil reserves in the range of "multiple Guyanas," and through persistent policy openings, India is translating geological potential into tangible exploration momentum. Such analogy is not only based on Guyana-type deep-sea success history but also on sedimentary basin structural advantages already proven within the Andaman Sea - sea sedimentary thick layers deposited in the area are regarded by geologists as ideal carriers of oil and gas enrichment. With the profound readjustment of the world energy configuration, this ocean area is becoming more and more a new hub of international deepsea oil and gas exploration with institutional innovation and endowments of resources.
02 Striving to emulate the "energy miracle" During the last decade, Guyana has become one of the globe's greatestEmerging energy countries with 11 billion barrels of established oil reserves and 16 trillion cubic feet of natural gas reserves. This success has raised great expectations from the global community for regions of exploration with the same geological conditions, and India's recent exploration plan in the Andaman Sea which it has opened has attracted considerable attention because it is believed by the Indian administration to be just as resource-abundant as Guyana. Geologic analyses reveal that the Andaman Sea is composed of dense Neogene marine sedimentary successions, thus providing an ideal area for oil and gas resource enrichment. It is approximated that the still-to-be-discovered oil and gas reserves in this sea area would be as high as 22 billion barrels, and Indonesia has already discovered 2 trillion cubic feet of natural gas reserves in the Indonesian seas of the southern Andaman Sea, once again witnessing the resource richness of this area. With the recent addition of India to establish a new policy of exploration permits, through policy measures like simplifying the process of approval and introducing international cooperation mechanisms, exploration and development of the Andaman Sea transitioned into a phase of favorable policies. Puri believes that this marine area is capable of emulating the Guyana-type "energy miracle", contributing its own "Daqing Oilfield" to India, and thus injecting new factors into India's energy equation and even worldwide.
03 Why are 22 billion barrels of oil and gas lying idle? Being a strategic sea area on the north-eastern edge of the Indian Ocean, bountiful oil and gas resources in the Andaman Sea have been familiar to India for a long time. However, during many years ago, this energy-thirsty country with over 80% foreign dependence on oil and an annual importation value of over 200 million tons has possessed a cautious attitude towards the development of this "treasure within its reach". Underlying this strategic choice are subtlety mounted trade-offs in geopolitics, nature conservation, and economy and technology. The Andaman Sea is an international shipping hub connecting the Bay of Bengal and the Strait of Malacca, with over 200 merchant ships passing through daily, more than 50% of the world's liquefied natural gas and 30% of the crude oil transportation volume. The Andaman-Nicobar Islands on its west side the throat of the eastern Indian Ocean. India is only capable of exercising jurisdiction over the 12-nautical-mile territorial sea and 200-nautical-mile exclusive economic zone around the islands but not in the inner shipping lane area, which is in international waters. This singular geopolitical feature led India to reject foreign investment for developing blocks in the vicinity of the prime shipping route on the ground of "international shipping route safety" in exploration tenders in the year around 2010. Although the naval base stationed here has strengthened the regional monitoring capability, it has also increased the risk of international disputes which exploration activities can generate. This oceanic region also has one of the most pristine coral reef ecosystems in the world, and the mangrove swamps along the coast are of pivotal importance for listed species such as the dugong and green turtle. In an assessment by India's Ministry of Environment and Forests, this region's ecological vulnerability positions it in the world's top 15%, and any process of exploration can trigger a chain of environmental risks. Geological survey shows that Andaman Sea oil and gas reservoirs are mostly scattered in ultra-deep waters over 3,000 meters, and the complex submarine salt dome tectonic structure and high-temperature and high-pressure conditions impose extremely high requirements on drilling equipment and engineering technology. Moreover, overseas oil majors are also doubtful about India's policy stability. In 2018, the sudden policy shift for the windfall tax resulted in slashing a significant amount of exploration expenditure by companies such as ExxonMobil. But with the increasing volatility of global energy prices, India is accelerating the formulation of the "oil and gas self-reliance" strategy, and the Andaman Sea is at the center of development with its 22 billion barrels of unfilled reserves. Behind this strategic shift, is India's delicate balance between energy security, environmental conservation, and economic growth.