Upstream oil majors return to Andamans, dig offshore wells Oil India, ONGC hope to strike it big this time

Shri Vijay puram 

Shri Vijay puram 24 march 2025. In a significant move, state-run oil producer Oil India Limited (OIL) has finished drilqling its first well in the Andaman sea while Oil and Natural Gas Corporation (ONGC) has just started drilling operations in the area, said officials. After its first well, OIL plans to drill two more, while ONGC has targeted an ultra deep water well in the largely unexplored basin, they added. After a hiatus of nearly three decades, OIL resumed seismic surveys in the Andaman offshore blocks in October 2020. The two blocks, AN-OSHP-2018/1 and AN-OSHP-2018/2, covering an area of 9,616.7 square km in the shallow waters, were awarded to the company in 2019. This was under the third round of open acreage licensing policy. Last year, OIL had hired a rig operated by Dolphin Drilling, a Norway-based contractor, known for its offshore oil and gas drilling. The anchor moored semi-submersible drilling unit reached the Andamans in October 2024. The contract was reportedly worth $ 154 million and was expected to last for about 14 months, local media had reported back then. The Andaman-Nicobar basin, located in the southeastern part of Bay of Bengal, is expected to hold significant reserves of natural gas and crude oil, the Centre feels. The area was opened for exploration and production activities after a long time in 2022. It was after restrictions imposed by defence and space agencies were removed.

         The basin forms a part of the island arc system, which extends from Myanmar in the north to Indonesia in the south. Back to deep water ONGC, which currently produces over 1.26 million barrels of oil equivalent per day or about 71 per cent of India's domestic production, has also commenced drilling at an ultra deep water well in the Andaman offshore area. "After successfully drilling two ultra-deep water wells off Cauvery Ultra deep water, the rig DDKG-1 has embarked on the re-exploration of the Andaman offshore," ONGC said in a post on X on Thursday.

Deep water exploration in India has so far been dominated by ONGC, which has drilled hundreds of deepwater wells since 2004. In its previous endeavours, the company had drilled six wells off the Andaman Islands back in 2013-14 but without commercial success.

The region has been key to ONGC's internal programme, which targets the probing of 1,700 million tonnes of oil and oil equivalent gas (MMTOE) of yet-to find (YTF) reserves during 2022-25, an official said. The plan back then was to drill six wells over the next three years. But after analysis of seismic data and extensive study of the identified prospects, the number had been whittled down to three last year, officials said.

Work was initially expected to commence by 2024-end. Hiring of floaters and rigs for exploration activities was also underway.