Samudra Manthan's 150 Deepwater Wells: The Contractor Side of the Programme

On 31 July 2026 the Union Cabinet approved the Samudra Manthan National Offshore Exploration Scheme with an outlay of Rs 84,084 crore, announced by the Press Information Bureau the following day and reported by The Hindu and ET EnergyWorld the same week. ONGC then set out a plan to drill 150 deepwater wells under the mission. Those two numbers are the whole brief for anyone placing offshore energy risk in India over the next few years.

The corpus already covers this exposure from the operator's chair, where control of well and operators extra expense sit at the centre of the programme. Read the offshore oil and gas operator risk profile for that view. This post takes the other side of the contract, because that is where the spend physically goes.

A scheme outlay does not buy an operator a policy. It buys rigs, vessels, seismic surveys, subsea hardware and yard fabrication, and every one of those is procured through a contract that names a contractor. The insurance obligation moves with the contract. In practice the money reaches:

• Drilling contractors supplying jack-ups, semi-submersibles and drillships on day-rate terms.
• Seismic vessel operators running streamer or ocean-bottom-node surveys.
• Subsea, ROV, diving and inspection-repair-maintenance service providers.
• Offshore logistics operators running platform supply vessels, anchor handlers and crew boats.
• Indian yards fabricating jackets, decks, manifolds and pipeline spools.

Each of those buys a different programme, and none of them buys the operator's programme. A broker who prices the campaign as one energy risk will miss the five or six separate placements that actually have to be bound before a rig can spud a well.

Offshore drilling contracts worldwide, including those written on Indian day-rate terms, allocate liability through a knock-for-knock indemnity rather than through fault. Each party takes its own people and its own property, whoever caused the loss. The contractor indemnifies the operator for injury to contractor personnel and for damage to contractor property, and the operator returns the favour for its own group. Negligence, including sole negligence, is normally carved into the indemnity so it survives the very argument a claimant would want to run.

This is not a legal footnote. It is the specification for the contractor's insurance buy. The contract does not ask a drilling contractor to be careful. It asks the contractor to carry, at its own cost, the specific covers that fund the indemnity it has just given. If the indemnity is broader than the policy behind it, the difference is uninsured balance sheet.

The mirror image applies to the well itself. Under the usual allocation the operator retains the well, the reservoir, the subsurface and pollution emanating from the well, which is why control of well and operators extra expense sit on the operator's programme. The contractor typically retains a defined slice of downhole liability, often capped, and holds redrill or in-hole equipment exposure. Reading the cap and the carve-outs is the first thing to do with any new contract.

Almost every contractor in this chain charters something. Rigs move under tow, supply boats run stores and mud, crew boats and helicopters move people, and seismic vessels are themselves the working asset. The insurance position depends on which charter form was signed, and the two common forms sit at opposite ends.

Under a bareboat charter the charterer takes the vessel without crew and effectively steps into the owner's shoes for the term. The charterer becomes the operator for insurance purposes and needs hull and machinery cover, or a named-assured position on the owner's hull policy, plus full protection and indemnity entry for crew, wreck removal and pollution. This is a shipowner's risk in all but title.

Under a time charter or a voyage charter the owner keeps crew, management and the hull risk. The charterer's exposure is narrower but real: damage to the chartered vessel where the charterer is legally liable, cargo carried, pollution arising from the charterer's orders or from cargo, damage to third-party property, and the cost of removing a wreck the charterer's operation created. That set is what charterers' liability insurance is written for, usually through a P&I club charterers' entry or a fixed-premium market facility, with a combined single limit that must be sized to the vessel and the field.

Three drafting points repeatedly cost money on Indian offshore charters:

1. Sub-charters. A logistics contractor that sub-charters a boat needs its charterers' liability cover to extend to the chain, or a loss falls between two policies.
2. Cover for the hull itself. Charterers' liability for damage to the chartered vessel is frequently sub-limited well below the hull value. If the charter makes the charterer liable up to hull value, match the sub-limit to it.
3. Named assureds and cross-liability. The operator, its co-venturers and the vessel owner will all want to be named. Cross-liability cover has to be present so the policy treats each assured as if separately insured.

The [marine hull insurance guide](/insurance-products/marine-hull-insurance-india-vessel-protection) covers the owner's side of these wordings in detail, and reading the two together is the fastest way to see where the charter has moved a risk.

Seismic vessel operators carry an unusual risk shape. The vessel matters, but the towed spread does too. Streamers, tail buoys, sources and, on ocean-bottom-node work, the nodes themselves are high-value equipment deployed in open water and routinely lost or damaged by weather, fishing gear, third-party vessels and entanglement. That exposure needs an explicit equipment section with an agreed value, cover while deployed and under tow, and a deductible set per occurrence rather than per item, because a single incident damages a run of sections.

Subsea and ROV contractors face the same problem in a different form. An ROV, a survey spread or a diving system is a mobile insured asset that spends its working life either on a vessel not owned by the contractor or on the seabed. The cover to look for is an offshore contractors equipment or plant policy written on an all-risks basis, worldwide-offshore territorial scope, including cover in transit, while being lifted, and while submerged, plus a loss of hire or standby element where the contract exposes the contractor to day-rate deductions after a breakdown.

Fabrication yards are the quiet gap. A jacket or manifold built in an Indian yard is covered by the yard's own material damage programme until it leaves, and by a project cargo or marine policy once loaded out. The load-out itself, the hours when the structure is on skid beams and half on a barge, is exactly where the two policies argue. Name the load-out explicitly in one of them and record which.

People are the largest single count of claims in offshore services and the exposure the tender documents scrutinise hardest. A contractor mobilising crews to a deepwater campaign is looking at four distinct instruments and needs all four aligned.

The statutory base is the Employee's Compensation Act, 1923 for workmen who fall within it, with employers' liability cover extending beyond the statutory scale where the employee sues at common law. On top of that, offshore contracts almost always require a group personal accident policy with a stated capital sum per person, typically expressed as a multiple of annual salary, covering death, permanent total disability and permanent partial disability on a 24-hour worldwide basis including travel to and from the installation.

The third instrument is medical evacuation. Deepwater work runs far enough offshore that a serious injury means a helicopter or a vessel transfer to shore, and evacuation cost is not automatically inside a group health policy. Ask for it by name.

The fourth is the knock-for-knock overlay. Because the contractor has indemnified the operator for injury to contractor personnel, its employers' liability and general liability covers must both accept contractual liability and waive subrogation against the operator group. A contractor with excellent personal accident limits and an employers' liability policy that excludes assumed contractual liability has not met its contract.

Two further points that get missed on Indian placements. Marine crew on a chartered vessel are the shipowner's P&I risk, not the contractor's, so do not double-buy. And personnel flown by helicopter should be checked against the aviation operator's passenger liability limits, since the contract will usually make the party arranging transport responsible for the shortfall.

Ask any offshore contracts manager which document consumes the most time between award and mobilisation and the answer is the certificate of insurance. It is a one-page summary of a programme that may run to several policies, and the operator's contracts team will refuse mobilisation until it says exactly what the contract requires. On a campaign the scale of 150 deepwater wells, with multiple contractors mobilising to a schedule, a certificate that does not match is a rig sitting idle on day rate.

What the operator's team is checking, line by line:

• Named assureds and additional assureds. The operator, its co-venturers, and often its other contractors, each named or covered as "other contractors and sub-contractors to the extent of the contract".
• Waiver of subrogation in favour of the operator group, stated on the certificate rather than promised in the policy file.
• Cross-liability, so one assured's claim against another is treated as a third-party claim.
• Primary and non-contributory wording, so the contractor's cover pays before the operator's programme rather than sharing with it.
• Contractual liability as assumed under the named contract, confirmed as insured.
• Limits and deductibles, matched to the contract schedule, with deductibles confirmed as for the contractor's account.
• Notice of cancellation or material change, usually 30 days to the operator.
• Territorial and operational scope, covering the specific offshore blocks and the water depth involved.

The other half of this document is the reverse flow. A contractor that sub-contracts diving, ROV or boat services has to collect the same certificate from each of its own sub-contractors, with itself and the operator named. Certificate control down the chain is a contracts-administration function that most Indian oilfield services firms staff too thinly.

The reason to start these conversations now is arithmetic. A programme of 150 deepwater wells does not create demand for one contractor's insurance. It creates simultaneous demand from every drilling contractor, vessel operator and subsea firm bidding the work, all approaching the same small pool of energy and marine underwriters in the same window.

Offshore energy liability and hull capacity for Indian risk is led domestically but sits substantially with reinsurers, and the appetite for deepwater exposure in a new campaign is finite. When several contractors present similar risks at once, three things happen: line sizes tighten, deductibles rise, and underwriters begin asking for risk-engineering evidence that a first-time deepwater contractor may not have assembled.

The practical schedule looks like this.

1. Twelve months out. Take the operator's standard contract insurance schedule to your broker and confirm, in writing from the lead market, that each requirement is achievable and at what indicative cost.
2. Nine months out. Fix the charter positions. Decide which vessels are bareboat and which are time-chartered, because that decision moves whole policies between parties and changes the premium materially.
3. Six months out. Bind or firm-order the equipment and charterers' liability sections, which are the hardest to place at short notice.
4. Three months out. Circulate draft certificates to the operator's contracts team for approval.
5. At mobilisation. Issue final certificates and confirm sub-contractor certificates are in hand.

The contractors who do this early bid with a costed insurance line and can hold price. The ones who wait until award are negotiating in a market that has already absorbed their competitors' risk, and are paying for the privilege of being last. On a campaign underwritten by an Rs 84,084 crore public commitment, that gap is the difference between winning work profitably and winning it and giving the margin back.