State-Run Oil Giants Resume Drilling in Andaman Offshore
In a major development, state-owned Oil India Limited (OIL) has completed drilling its first well in the Andaman Sea, while Oil and Natural Gas Corporation (ONGC) has just begun its drilling operations in the region, officials confirmed. Following its initial well, OIL plans to drill two more, while ONGC has set its sights on an ultra-deepwater well in the largely unexplored basin, they added.
After 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—spanning 9,616.7 square kilometers in shallow waters, were awarded to the company in 2019 under the third round of the Open Acreage Licensing Policy.
Last year, OIL contracted a rig operated by Norway-based Dolphin Drilling, a company specializing in offshore oil and gas drilling. The semi-submersible, anchor-moored drilling unit arrived in the Andamans in October 2024 under a contract valued at approximately $154 million, with an estimated duration of 14 months, according to local media reports.
The Andaman-Nicobar basin, located in the southeastern Bay of Bengal, is believed to hold significant natural gas and crude oil reserves, according to government estimates. The area was reopened for exploration and production activities in 2022 after defense and space agency restrictions were lifted. The basin is part of an island arc system that stretches from Myanmar in the north to Indonesia in the south.
ONGC Expands Deepwater Drilling Operations
ONGC, which accounts for approximately 71% of India’s domestic oil production—equivalent to over 1.26 million barrels of oil equivalent per day—has now started drilling an ultra-deepwater well in the Andaman offshore.
“Following the successful drilling of two ultra-deepwater wells off the Cauvery Basin, the rig DDKG-1 has now begun re-exploration of the Andaman offshore,” ONGC announced on X on Thursday.
India’s deepwater exploration has been largely dominated by ONGC, which has drilled hundreds of deepwater wells since 2004. The company had previously drilled six wells off the Andaman Islands in 2013-14, though they did not yield commercially viable discoveries.
The Andaman region remains a key part of ONGC’s internal strategy to explore 1,700 million tonnes of oil and oil-equivalent gas (MMTOE) in yet-to-be-discovered (YTF) reserves between 2022 and 2025, an official said.
Initially, ONGC had planned to drill six wells over three years. However, after detailed seismic data analysis and further study of identified prospects, the target was revised to three wells last year, officials noted.
Exploration work was initially scheduled to begin by late 2024, with hiring of floaters and rigs already in progress.
