Why India’s Andaman Oil Finds Could Be a 'Guyana-Sized' Game-Changer

India stands on the brink of a transformative energy breakthrough, with Union Minister for Petroleum and Natural Gas Hardeep Singh Puri expressing strong optimism about a potential "Guyana-sized" oil discovery in the Andaman Sea. This ambitious claim, made in an exclusive interview with The New Indian on June 11, 2025, has sparked excitement about India’s energy future. Puri’s confidence stems from ongoing exploration efforts, policy reforms, and early signs of significant reserves that could rival Guyana’s massive 11.6 billion-barrel find. Here’s a deep dive into why Puri believes the Andaman Sea could reshape India’s energy landscape and propel its economy toward a $20 trillion valuation.

The Guyana Benchmark: A Transformative Discovery

Guyana’s rise to global energy prominence began in 2015 when ExxonMobil, Hess Corporation, and CNOOC discovered over 11.6 billion barrels of oil and gas off its coast, transforming the small South American nation into the world’s 17th-largest oil reserve holder. This find, which required drilling 46 costly wells before striking oil on the 47th, led to a staggering 62.3% GDP growth in 2022, according to the International Monetary Fund, with production now exceeding 800,000 barrels per day. Puri draws a direct parallel, stating, “It’s only a matter of time before we find a big Guyana in the Andaman Sea,” citing the potential for reserves as large as 184,440 crore liters (approximately 11.6 billion barrels). Such a discovery could catapult India’s economy from $3.7 trillion to $20 trillion, mirroring Guyana’s economic leap.

Why the Andaman Sea?

The Andaman and Nicobar Islands, located in the southeastern Bay of Bengal, sit atop a largely unexplored sedimentary basin spanning 2.25 lakh square kilometers. Classified as a Category II basin by the Directorate General of Hydrocarbons (DGH), it has sub-commercial discoveries with high potential for commercial production. Geological similarities to hydrocarbon-rich regions like North Sumatra (Indonesia) and Irrawaddy-Margui (Myanmar) further bolster optimism. Recent exploration by state-run companies like Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) has revealed “green shoots”—early signs of oil and gas in wells like Suryamani (4 million metric tonnes of oil equivalent) and Neelmani (1.2 million metric tonnes). Deeper drilling at 5,000 meters in four locations is ongoing, with additional finds at depths of 2,865 and 2,957 meters showing promise.

Puri emphasized that India’s 3.5 million square kilometers of sedimentary basins were historically underexplored, with only 8% tapped until recently. The government’s decision to open 1 million square kilometers of previously “no-go” areas for exploration and production (E&P) has unlocked new opportunities, particularly in the Andaman Sea. The latest Open Acreage Licensing Policy (OALP) Round 9 offered 250,000 square kilometers for bidding, with 38% targeting these new areas, signaling robust interest.

Policy Reforms Fueling Exploration

Puri’s optimism is grounded in sweeping reforms since 2016, including the shift from production-sharing to revenue-sharing contracts under OALP, which has attracted private and international players. The Oil Fields Regulation and Development Amendment Bill, tabled in 2025, addresses outdated 1948 legislation, resolving overlaps between minerals and petroleum leases. This bill enhances regulatory clarity, simplifies approvals, and permits integrated renewable and low-carbon projects within oilfield blocks, fostering innovation. Puri noted, “The new bill brings certainty, predictability,” addressing private sector concerns about bureaucratic delays and no-objection certificates.

ONGC’s record-breaking 541 wells drilled in FY24—the highest in 37 years—reflects this renewed vigor, with ₹37,000 crore in capital expenditure. OIL has also intensified efforts, deploying advanced rigs like the Blackford Dolphin at sites like Vijaya Puram-1 in shallow Andaman waters. These efforts, combined with seismic surveys completed in 2023, underscore India’s commitment to unlocking its offshore potential.

Economic and Strategic Implications

India imports over 85% of its crude oil and 50% of its natural gas, making it the world’s third-largest oil importer after the U.S. and China. This dependency strains the economy, especially amid global price volatility, as seen during the Israel-Iran conflict in 2025. A Guyana-sized discovery could slash import reliance, saving billions in foreign exchange and enhancing energy security. Puri highlighted that even a 5-billion-barrel find would be a “game-changer,” while a larger reserve could transform India into a net oil exporter, akin to Guyana’s shift from obscurity to a global energy player.

Economically, the impact could be monumental. Puri envisions a discovery propelling India’s GDP to $20 trillion, driven by reduced import costs, job creation, and infrastructure development in the Andaman and Nicobar Islands. The region could become an energy hub, attracting investment in logistics and ancillary industries. Strategic petroleum reserves, currently at Visakhapatnam, Mangalore, and Padur, with new sites proposed in Odisha and Rajasthan, would gain added significance. The 2025–26 budget’s ₹55.97 billion allocation for SPRs underscores this focus on energy security.

Challenges and Environmental Concerns

Offshore exploration is capital-intensive, with each well costing around $100 million compared to $4 million for onshore wells. Guyana’s success came after 46 dry wells, highlighting the patience and investment required. Puri acknowledged these costs but pointed to ONGC and OIL’s intensified drilling as evidence of commitment. However, environmental concerns loom large. The Andaman Sea hosts 179 coral species, wildlife sanctuaries, and marine parks, making it a biodiversity hotspot. Guyana’s oil boom came at the cost of environmental degradation, with projections of coastal flooding by 2030. India must balance energy ambitions with sustainable practices to avoid similar trade-offs.

The Road Ahead

While Puri cautions against premature speculation, the “2.5 pages of discovery listings” and ongoing deep-water drilling signal progress. The Andaman Basin’s untapped potential, coupled with policy reforms and geological promise, supports Puri’s confidence. If successful, this discovery could reduce India’s import dependency, strengthen its energy security, and drive unprecedented economic growth. As Puri stated, “We have the potential of several Guyanas in the Andaman,” positioning India for a transformative energy future.

Sources: The New Indian, Hindustan Times, Moneycontrol, The Hindu, Economic Times