For decades, India’s hydrocarbon map barely moved. Exploration stayed confined to familiar provinces while nearly a million square kilometres of sedimentary basin lay locked behind regulatory barriers. That inertia is now breaking — and the Andaman Sea is at the centre of the shift.
After opening up close to one million sq km of sedimentary area and dismantling long-standing restrictions, the government has triggered the largest acreage offering in India’s exploration history under the Open Acreage Licensing Policy (OALP). Frontier basins, once ignored, are suddenly drawing serious bids. And nowhere is activity accelerating faster than offshore Andaman.
Breaking the Inertia
State-run explorers are already drilling. Oil India Ltd has confirmed natural gas presence in its shallow offshore well Vijayapuram-2 — the first hydrocarbon occurrence reported in the basin under India’s renewed frontier push. Intermittent gas inflows during testing, backed by lab analysis, point to what the company calls a “technically significant” indicator of a working petroleum system.
ONGC, running a parallel deepwater campaign, has also reported hydrocarbon traces and petroleum indicators, though it is cautiously evaluating commercial viability. More appraisal drilling will follow.
Taken together, the signals mark the most concrete progress yet in a basin long viewed as geologically promising but commercially risky. The Andaman offshore lies along a complex tectonic arc linked to proven hydrocarbon systems across Southeast Asia, particularly offshore Myanmar and Indonesia — a geological setting that has fuelled optimism among energy analysts.
What was missing was policy backing and sustained capital. Both are now in place. Under the Hydrocarbon Exploration and Licensing Policy (HELP), India moved from a cost-recovery to a revenue-sharing regime, granted marketing and pricing freedom for difficult-terrain gas, and simplified approvals. The OALP further transformed the landscape by allowing companies to identify and bid for blocks year-round using national geological data. The result: a decisive pivot from stagnation to scale.
Infrastructure Gaps
But the real test lies ahead.
Industry experts caution that early gas shows are only the first step in building a commercially viable offshore province. “Andaman is a frontier basin and historically underexplored. Indian NOCs are drilling in technical partnership with reputed global players. There have been petroleum shows and more work needs to be done,” said Rajnish Gupta, Partner, Tax and Economic Policy Group at EY India.
“Given the limited presence of existing production or pipeline infrastructure, discovery would need to be of the requisite scale that can underpin the development of the necessary infrastructure. A large-scale discovery will also spur interest amongst new venture teams and investors globally,” he added.
Unlike mature offshore producing regions such as Mumbai Offshore, the Andaman basin currently lacks evacuation pipelines, processing facilities and logistical infrastructure — meaning any commercial discovery would require substantial greenfield investment across the value chain.
But frontier plays demand patience — Guyana’s offshore boom followed years of high-risk drilling before payoff. India’s own KG basin evolved the same way. For a country that imports nearly 88% of its crude oil and a large share of its gas, the stakes are strategic. Even a moderate commercial discovery in Andaman would strengthen energy security, attract global capital and reshape India’s upstream profile.
What has changed is not just geology, but intent. The basin has moved from the margins to the mainstream of policy. Whether Andaman becomes India’s next producing province will depend on the drill bit. But for the first time in decades, India’s hydrocarbon frontier is expanding — not contracting.