Deep Prospects, Deeper Challenges: Exploring the Hydrocarbon Potential of the Andaman-Nicobar Basin

By IndraStra Global Editorial Team

The Andaman-Nicobar Basin (AN Basin), nestled in the southeastern expanse of the Bay of Bengal, represents a frontier of untapped potential in India’s quest for energy security. Spanning 47,000 square kilometers, including vast deep-water regions, this basin forms a critical part of the Island Arc System stretching from Myanmar to Indonesia. Its geological complexity and promising hydrocarbon prospects have drawn attention from explorers and policymakers alike, yet the path to unlocking its resources is fraught with challenges. This basin, shaped by tectonic forces and subduction processes, offers a unique opportunity to bolster India’s energy reserves, but its exploration demands careful consideration of geological uncertainties, technical limitations, and environmental concerns. Drawing exclusively from the insights provided by the Directorate General of Hydrocarbons (DGH), this article explores the potential and pitfalls of the AN Basin, presenting a balanced perspective on its role in India’s energy future. 
The basin’s origins lie in the tectonic dance of the Indian Plate, which, during the Cretaceous period, moved northward and rotated anticlockwise, underthrusting beneath the Asian Plate. This subduction process gave rise to a distinctive Island Arc System, with the AN Basin emerging as a forearc basin—a depression formed between the volcanic arc and the outer island arc as the outer arc rose steeply. The Andaman chain of islands, part of a paleogeographic regime tied to the Great Indonesian Island System and extending to the Burmese Arc, stretches over 5,000 kilometers. This geological setting has created a basin with a complex stratigraphy, ranging from Cretaceous to Recent sediments, and a structural framework marked by anticlinal and fault-related traps, pinchouts, and carbonate buildups. The basin’s estimated prognosticated resources of 180 million metric tonnes (MMT) of hydrocarbons attest to its significance, yet the journey from potential to production is far from straightforward. 
Exploration in the AN Basin began in earnest in 1959, when the Oil and Natural Gas Corporation (ONGC) initiated geological mapping. Since then, 5,433 square kilometers have been covered through reconnaissance, semi-detailed, and detailed geological surveys, providing a foundational understanding of the basin’s surface geology. The islands themselves expose rocks primarily from the Cretaceous to Oligocene periods, while Neogene strata dominate in areas like Ritchie’s Archipelago. Three major unconformities have been identified, marking significant shifts in the basin’s depositional history. Geophysical surveys, starting in 1977, have further illuminated the subsurface, with ONGC acquiring 6,370 line kilometers (LKM) of 24-fold seismic data, followed by additional surveys in 1979 and 1982. These efforts have revealed a diverse range of exploration targets, from carbonate platforms and buildups to turbidites and gas hydrates in the Neogene sequence. 
The basin’s petroleum systems are varied, encompassing deeply buried thermogenic systems in the ponded forearc, thermally driven systems around the volcanic arc, and biogenic or shallow gas systems. The Port Blair Formation, identified as the main reservoir facies, exhibits variable properties across the basin. On the Andaman Islands, it comprises conglomerates and pebbles interspersed with silt and shale, with the Middle Miocene section hosting significant carbonate reservoirs. Drilling results confirm that carbonate platforms, particularly from the Middle and Lower Miocene, are key reservoir targets, especially in the central uplands and outer high regions. Porosity pods within Tertiary limestones, as observed in offshore Sumatra and the Andaman well AN-1-1, offer excellent reservoir potential. Meanwhile, onlapping sedimentary sequences over the slope of the magmatic arc and pinchout features in the invisible bank area create ideal entrapment conditions for hydrocarbons. 
The discovery of gas in the Middle Miocene limestone of well AN-1-1, drilled in 1980, marked a significant milestone, with a flow rate of 180,000 cubic meters per day. This find, coupled with minor gas indications from Early Miocene vitric ash beds in well AN-32-1 and Cretaceous sandstone in well AN-11, confirms the presence of hydrocarbons in the basin. Geochemical sniffer surveys conducted in 1988, covering 2,500 LKM in the eastern Andaman offshore, detected wet gas in recent sediments, suggesting subsurface reservoirs. Seismic data further highlight attractive targets, including carbonate buildups in Eocene to Miocene sequences and turbidites in the Neogene section. These findings align with the basin’s structural and stratigraphic complexity, where anticlinal and fault-related structures dominate post-Oligocene sediments, while stratigraphic traps like pinchouts, wedgeouts, and reefs hold significant potential. 
Despite these promising indicators, the AN Basin remains underexplored, particularly in its deep-water regions and inner slope. Of the 15 exploratory wells drilled, primarily in the Neill and Havelock Islands, only one targeted the western offshore, leaving vast areas untested. The inner slope, in particular, has seen limited drilling, despite hosting anticlinal structures within the Cretaceous-Oligocene sequence that offer favorable source and reservoir facies. The basin’s structural framework, characterized by arcuate fault zones reflecting the westerly subduction zone, adds complexity to exploration efforts. Seismic anomalies along north-south lines and anticlinal prospects with structural inversion further indicate the basin’s potential, but translating these prospects into viable discoveries requires overcoming significant hurdles. 
One of the primary challenges is the basin’s geological variability. Well data reveal wide variations in stratigraphy and lithological constituents, complicating the identification of consistent reservoir targets. The Neogene sequence, while prospective for biogenic gas, is generally immature for thermogenic hydrocarbon generation, limiting its potential for oil. The presence of kerogen types IIB and III in the pre-Neogene section, as observed in well AN-32-1, suggests that gas in these deeper sections may not be thermally mature, further constraining exploration strategies. Additionally, the basin’s deep-water environment poses logistical and technical challenges. Drilling in deep waters is costly and technologically demanding, requiring advanced equipment and expertise. The limited number of wells drilled to date—12 in total, with eight targeting the Neogene section—highlights the slow pace of exploration and the need for more extensive drilling to confirm the basin’s resource potential.
Environmental considerations also loom large. The Andaman and Nicobar Islands are ecologically sensitive, hosting unique biodiversity and fragile marine ecosystems. Exploration activities, particularly in offshore areas, must navigate strict environmental regulations to minimize impacts on marine life and coastal habitats. The presence of gas hydrates, identified in recent seismic data, adds another layer of complexity. While gas hydrates represent a potential future resource, their extraction is technically challenging and could pose environmental risks if not managed carefully. Balancing exploration ambitions with environmental stewardship will be critical to sustaining public and regulatory support for hydrocarbon development in the basin. 
The New Exploration Licensing Policy (NELP) has been instrumental in advancing exploration efforts. Under NELP-IV, two deep-water blocks, AN-DWN-2002/1 and AN-DWN-2002/2, were awarded to ONGC, while NELP-V saw blocks AN-DWN-2003/1 and AN-DWN-2003/2 awarded to ONGC and a consortium of ONGC, ENI, and GAIL, respectively. A block in the eastern Andaman was offered under NELP-VII, signaling continued interest in the basin. These blocks have benefited from extensive 2D and 3D seismic surveys, covering 10,000 square kilometers and 1,851 square kilometers, respectively, in block AN-DWN-2002/1. These surveys have identified diverse play types, including structural, strati-structural, and purely stratigraphic plays, with prospects ranging from carbonate platforms to channel-levee-fan complexes. Seismic sections reveal platformal carbonates and anticlinal features with potential fault closures, offering tantalizing glimpses of the basin’s hydrocarbon potential. 
Yet, the slow progress in converting these prospects into discoveries raises questions about the basin’s commercial viability. The gas discovery in well AN-1-1, while significant, has not yet led to large-scale production, and minor gas indications in other wells suggest that commercial accumulations may be elusive. Comparisons with adjacent basins, such as those in Sumatra, which share similar geological settings and host commercial hydrocarbon fields, provide optimism but also highlight the need for further exploration to confirm analogous potential in Andaman-Nicobar. The southward extension of the carbonate section in the northern forearc basin and the presence of large anticlinal structures in the south offer promising targets, but their development hinges on overcoming technical and economic barriers. 
Economically, the high costs of deep-water exploration and the uncertainty of finding commercially viable reserves pose significant risks. The basin’s remote location and limited infrastructure further complicate development, requiring substantial investment in pipelines, processing facilities, and transportation networks. For India, a country striving to reduce its dependence on imported energy, the AN Basin represents a strategic opportunity, but one that must be weighed against these costs. Policymakers and industry stakeholders must carefully assess whether the basin’s 180 MMT of prognosticated resources justify the investment, particularly when compared to more established onshore and shallow-water basins. 
Prospectively, the AN Basin’s future as a hydrocarbon province depends on a concerted effort to address its challenges while capitalizing on its opportunities. Continued investment in seismic surveys and exploratory drilling is essential to refine the basin’s geological model and identify high-potential targets. Advances in deep-water drilling technology could lower costs and improve success rates, making the basin more attractive to investors. Collaboration between ONGC, international partners like ENI and GAIL, and regulatory bodies like the DGH will be crucial in driving exploration forward. At the same time, robust environmental safeguards must be implemented to protect the region’s ecosystems, ensuring that exploration aligns with India’s broader sustainability goals. 
Long overlooked, the AN Basin is now drawing attention for its untapped hydrocarbon potential. Its geological complexity, marked by carbonate reservoirs, anticlinal traps, and stratigraphic pinchouts, offers significant hydrocarbon potential, as evidenced by the gas discovery in well AN-1-1 and indications in other wells. Yet, its underexplored inner slope, variable stratigraphy, and deep-water challenges demand patience and innovation. The basin’s estimated 180 MMT of resources could play a vital role in India’s energy mix, but realizing this potential requires balancing ambition with pragmatism. By addressing technical, economic, and environmental hurdles, India can unlock the AN Basin’s riches, contributing to a more secure and sustainable energy future. The journey is long, but the stakes are high, and the rewards could be transformative.  

Regional Context: Hydrocarbon Exploration in the Wider Andaman Sea

While India’s efforts in the AN Basin remain in early stages, neighboring countries bordering the Andaman Sea—namely Indonesia, Malaysia, and Thailand—have pursued varying levels of hydrocarbon exploration, offering important regional parallels and lessons.

Indonesia

Indonesia is actively pursuing hydrocarbon exploration in the Andaman Sea, particularly around the North Sumatra Basin. The country has attracted international interest, with Mubadala Energy and Harbour Energy leading key projects. The Central Andaman block was recently awarded by Indonesia’s oil and gas regulator, MIGAS, to Harbour Energy (60% operated interest) and Mubadala Energy (40%). This follows successful operations in the South Andaman block, where Mubadala completed an extensive drilling campaign appraising the Layaran discovery, including wells like Layaran-1, Tangkulo-1, and Layaran-2. These activities have confirmed multi-trillion cubic feet (TCF) gas and condensate potential, positioning Indonesia as a rising deepwater exploration hub in the region.

Malaysia

Malaysia has had a limited and largely indirect role in Andaman Sea hydrocarbon activity. Its national oil company, Petronas, previously operated the Yetagun gas field, located in the Andaman Sea off the coast of Myanmar. However, Petronas has since exited the project, and the field is now operated by a different entity. While Malaysian involvement once held strategic importance, no Malaysian-owned rigs are currently active in the area. A Singapore-based company has deployed a semi-submersible rig for drilling in the Andaman Sea, but it is not affiliated with Malaysian operations.

Thailand

Thailand began oil and gas exploration in the Andaman Sea in 1968, awarding 17 offshore blocks, mainly in shallow waters off its western coast. Over the years, several major companies, including Unocal, Total, and Statoil, acquired concessions during licensing rounds such as the 14th Thai Licensing Round. Despite this early momentum, Thailand has shifted its focus in recent decades to the Gulf of Thailand, where the Overlapping Claims Area (OCA) is believed to contain significant oil and gas reserves. While the Andaman Sea remains a potential exploration zone, it currently plays a secondary role in Thailand’s energy strategy.

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